[Senate Report 108-421]
[From the U.S. Government Publishing Office]
108th Congress Report
SENATE
2d Session 108-421
_______________________________________________________________________
ACTIVITIES OF THE COMMITTEE ON GOVERNMENTAL AFFAIRS
__________
R E P O R T
of the
COMMITTEE ON GOVERNMENTAL AFFAIRS UNITED STATES SENATE
and its
SUBCOMMITTEES
for the
ONE HUNDRED SEVENTH CONGRESS
December 7, 2004--Ordered to be printed
For Sale by the Superintendent of Documents, U.S. Government Printing Office
Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; (202) 512�091800
Fax: (202) 512�092250 Mail: Stop SSOP, Washington, DC 20402�090001
COMMITTEE ON GOVERNMENTAL AFFAIRS
SUSAN M. COLLINS, Maine, Chairman
TED STEVENS, Alaska JOSEPH I. LIEBERMAN, Connecticut
GEORGE V. VOINOVICH, Ohio CARL LEVIN, Michigan
NORM COLEMAN, Minnesota DANIEL K. AKAKA, Hawaii
ARLEN SPECTER, Pennsylvania RICHARD J. DURBIN, Illinois
ROBERT F. BENNETT, Utah THOMAS R. CARPER, Delaware
PETER G. FITZGERALD, Illinois MARK DAYTON, Minnesota
JOHN E. SUNUNU, New Hampshire FRANK LAUTENBERG, New Jersey
RICHARD C. SHELBY, Alabama MARK PRYOR, Arkansas
Michael D. Bopp, Staff Director and Chief Counsel
Ann C. Fisher, Deputy Staff Director
Joyce A. Rechtschaffen, Minority Staff Director and Counsel
Holly A. Idelson, Minority Counsel
Amy B. Newhouse, Chief Clerk
COMMITTEE ON GOVERNMENTAL AFFAIRS DURING THE 107TH CONGRESS UNTIL JUNE
6, 2001 \1\
FRED THOMPSON, Tennessee, Chairman
JOSEPH I. LIEBERMAN, Connecticut, Ranking Member
TED STEVENS, Alaska CARL LEVIN, Michigan
SUSAN M. COLLINS, Maine DANIEL K. AKAKA, Hawaii
GEORGE V. VOINOVICH, Ohio RICHARD J. DURBIN, Illinois
PETE V. DOMENICI, New Mexico \2\ ROBERT G. TORRICELLI, New Jersey
THAD COCHRAN, Mississippi MAX CLELAND, Georgia
JUDD GREGG, New Hampshire THOMAS R. CARPER, Delaware
ROBERT F. BENNETT, Utah JEAN CARNAHAN, Missouri
------
SUBCOMMITTEES OF THE 107TH CONGRESS
INTERNATIONAL SECURITY, PROLIFERATION, AND FEDERAL SERVICES
THAD COCHRAN, Mississippi, Chairman
DANIEL K. AKAKA, Hawaii, Ranking Member
TED STEVENS, Alaska CARL LEVIN, Michigan
SUSAN M. COLLINS, Maine ROBERT G. TORRICELLI, New Jersey
PETE V. DOMENICI, New Mexico \2\ MAX CLELAND, Georgia
JUDD GREGG, New Hampshire THOMAS R. CARPER, Delaware
ROBERT F. BENNETT, Utah JEAN CARNAHAN, Missouri
------
OVERSIGHT OF GOVERNMENT MANAGEMENT, RESTRUCTURING AND THE DISTRICT OF
COLUMBIA
GEORGE V. VOINOVICH, Ohio, Chairman
RICHARD J. DURBIN, Illinois, Ranking Member
TED STEVENS, Alaska DANIEL K. AKAKA, Hawaii
SUSAN M. COLLINS, Maine ROBERT G. TORRICELLI, New Jersey
PETE V. DOMENICI, New Mexico \2\ THOMAS R. CARPER, Delaware
THAD COCHRAN, Mississippi JEAN CARNAHAN, Missouri
------
PERMANENT SUBCOMMITTEE ON INVESTIGATIONS
SUSAN M. COLLINS, Maine, Chairman
CARL LEVIN, Michigan, Ranking Member
TED STEVENS, Alaska DANIEL K. AKAKA, Hawaii
GEORGE V. VOINOVICH, Ohio RICHARD J. DURBIN, Illinois
PETE V. DOMENICI, New Mexico \2\ ROBERT G. TORRICELLI, New Jersey
THAD COCHRAN, Mississippi MAX CLELAND, Georgia
JUDD GREGG, New Hampshire THOMAS R. CARPER, Delaware
ROBERT F. BENNETT, Utah JEAN CARNAHAN, Missouri
\1\ Senator Lieberman was Chairman from January 3, 2001 until January
20, 2001, when Senator Thompson became Chairman. On June 6, 2001,
Senator Lieberman became Chairman for the remainder of the 107th
Congress.
\2\ Senator Domenici left the Committee and Senator Fitzgerald replaced
him on April 23, 2002.
COMMITTEE ON GOVERNMENTAL AFFAIRS DURING THE 107TH CONGRESS AS OF JUNE
6, 2001 \1\
JOSEPH I. LIEBERMAN, Connecticut, Chairman
CARL LEVIN, Michigan FRED THOMPSON, Tennessee
DANIEL K. AKAKA, Hawaii TED STEVENS, Alaska
RICHARD J. DURBIN, Illinois SUSAN M. COLLINS, Maine
ROBERT G. TORRICELLI, New Jersey GEORGE V. VOINOVICH, Ohio
MAX CLELAND, Georgia THAD COCHRAN, Mississippi
THOMAS R. CARPER, Delaware ROBERT F. BENNETT, Utah
JEAN CARNAHAN, Missouri JIM BUNNING, Kentucky
MARK DAYTON, Minnesota PETER G. FITZGERALD, Illinois \2\
------
SUBCOMMITTEES OF THE 107TH CONGRESS
INTERNATIONAL SECURITY, PROLIFERATION, AND FEDERAL SERVICES
DANIEL K. AKAKA, Hawaii, Chairman
CARL LEVIN, Michigan THAD COCHRAN, Mississippi
ROBERT G. TORRICELLI, New Jersey TED STEVENS, Alaska
MAX CLELAND, Georgia SUSAN M. COLLINS, Maine
THOMAS R. CARPER, Delaware GEORGE V. VOINOVICH, Ohio
JEAN CARNAHAN, Missouri ROBERT F. BENNETT, Utah
MARK DAYTON, Minnesota PETER G. FITZGERALD, Illinois
------
OVERSIGHT OF GOVERNMENT MANAGEMENT, RESTRUCTURING AND THE DISTRICT OF
COLUMBIA
RICHARD J. DURBIN, Illinois, Chairman
DANIEL K. AKAKA, Hawaii GEORGE V. VOINOVICH, Ohio
ROBERT G. TORRICELLI, New Jersey TED STEVENS, Alaska
THOMAS R. CARPER, Delaware SUSAN M. COLLINS, Maine
JEAN CARNAHAN, Missouri THAD COCHRAN, Mississippi
MARK DAYTON, Minnesota PETER G. FITZGERALD, Illinois
------
PERMANENT SUBCOMMITTEE ON INVESTIGATIONS
CARL LEVIN, Michigan, Chairman
DANIEL K. AKAKA, Hawaii SUSAN M. COLLINS, Maine
RICHARD J. DURBIN, Illinois TED STEVENS, Alaska
ROBERT G. TORRICELLI, New Jersey GEORGE V. VOINOVICH, Ohio
MAX CLELAND, Georgia THAD COCHRAN, Mississippi
THOMAS R. CARPER, Delaware ROBERT F. BENNETT, Utah
JEAN CARNAHAN, Missouri JIM BUNNING, Kentucky
MARK DAYTON, Minnesota PETER G. FITZGERALD, Illinois
\1\ Senator Lieberman became Chairman on June 6, 2001.
\2\ Senator Domenici left the Committee and Senator Fitzgerald replaced
him on April 23, 2002.
CONTENTS
------
Page
I. Highlights of Activities...................................... 1
Homeland Security............................................ 3
Commission to Investigate the Terrorist Attacts.............. 5
E-Government and Information Resources Management............ 6
The Collapse of Enron Corporation............................ 7
Government Organization...................................... 12
Regulatory Oversight......................................... 12
Government Workforce Improvements............................ 14
Financial Management......................................... 15
Small Business Paperwork Relief.............................. 16
Public Health and Safety..................................... 16
Election Reform.............................................. 16
Energy Deregulation.......................................... 16
Financial Disclosure for Presidential Nominees............... 17
D.C. Legislation............................................. 17
Export Controls.............................................. 18
Monitoring, Accountability and Competition in the Federal and
Service Contract Workforce................................. 18
Entertainment Ratings........................................ 18
II. Committee Jurisdiction....................................... 18
III. Bills and Resolutions Referred and Considered............... 19
IV. Hearings..................................................... 19
V. Reports, Prints, Studies, and GAO Reports..................... 40
VI. Official Communications...................................... 47
VII. Legislative Actions......................................... 47
Measures Enacted Into Law.................................... 47
Measures Favorably Reported by Committee and Passed by the
Senate..................................................... 65
Selected Measures Considered by the Committee................ 67
VIII. Presidential Nominations................................... 68
IX. Activities of the Subcommittees.............................. 72
International Security, Proliferation, and Federal Services
Subcommittee
I. Hearings...................................................... 72
II. Legislation.................................................. 81
III. Report and GAO Reports...................................... 85
Oversight of Government Management, Restructuring, and the District of
Columbia Subcommittee
I. Hearings...................................................... 87
II. GAO Reports.................................................. 109
III. Legislation................................................. 110
Permanent Subcommittee on Investigations
I. Historical Background......................................... 116
II. Subcommittee Hearings During the 107th Congress.............. 121
III. Legislation Activities During the 107th Congress............ 138
IV. Reports, Prints, and Studies................................. 141
V. Requested and Sponsored Reports From GAO...................... 152
108th Congress
108th Congress Report
SENATE
2d Session 108-421
======================================================================
ACTIVITIES OF THE COMMITTEE ON GOVERNMENTAL AFFAIRS DURING THE 107TH
CONGRESS
_______
December 7, 2004.--Ordered to be printed
_______
Ms. COLLINS, from the Committee on Governmental Affairs, submitted the
following
REPORT
This report reviews the legislative and oversight
activities of the Committee on Governmental Affairs during the
107th Congress. These activities parallel the broad scope of
responsibilities vested in the Committee by the Legislative
Reorganization Act of 1946, as amended, rule XXV(k) of the
Standing Rules of the Senate, and additional authorizing
resolutions. Senator Thompson was Chairman of the Committee at
the outset of the 107th Congress. In June 2001, majority
control of the Senate changed hands and Senator Lieberman
served as Chairman for the remainder of the Congress.
I. Highlights of Activities
In the 107th Congress, the Senate Committee on Governmental
Affairs responded quickly and decisively to the crisis
occasioned by the devastating terrorist attacks of September
11, 2001. The Committee was uniquely qualified to shape the
government's organizational response to the terrorist threat,
both because of its jurisdiction over government
reorganization, and because of its experience addressing a
broad variety of Executive Branch management challenges. The
result of the Committee's efforts was landmark legislation
signed into law that fundamentally reorganized the Federal
Government to meet the threat of terrorism and other threats to
our homeland security--the Federal Government's most
significant reorganization in a half century. For the first
time, a new Department has as its primary mission protecting
the American homeland from a variety of threats, the foremost
of which is a terrorist attack. If fully and effectively
implemented, the legislation will greatly enhance our
government's capacity to deal with threats to our homeland.
In the months after the September 11 attacks, the Committee
engaged in vigorous oversight of the state of the Nation's
ability to prevent, protect against and respond to a terrorist
attack. Hearings probed the organization and vulnerabilities of
many aspects of our government's operations and examined
possible solutions. One month after the September 11 attacks,
Chairman Lieberman and Senator Specter introduced a bill to
create a new Department of Homeland Security to reorganize the
Federal Government's dispersed and dysfunctional domestic
defense programs into a consolidated Department of Homeland
Security led by a Secretary accountable to the American people.
The proposal (twice approved by the Committee) evolved through
the contributions of other Members of the Committee, other
Senators, and, ultimately, the Administration. After a vigorous
Senate debate on the legislation, in which Chairman Lieberman
and Ranking Minority Member Thompson served as floor managers,
the legislation to create a new Department was enacted as the
Homeland Security Act of 2002 (H.R. 5005, Public Law 107-296).
Chairman Lieberman also introduced, and the Committee
approved, legislation to establish an independent commission to
investigate the specific facts and circumstances of the
terrorist attacks, and to make recommendations based on the
commission's conclusions (S. 1867). That legislation also
passed at the end of the Congress, as part of the Intelligence
Reauthorization Act of 2002 (Public Law 107-306).
The Committee also continued to pursue its wide reaching
legislative and oversight mandates to promote the operation of
an efficient and effective government, and to ensure the
vigorous implementation of the Nation's laws by the Executive
Branch. The Committee developed, approved, and ultimately saw
signed into law historic legislation harnessing modern
information technology to make government more professional and
proficient in serving the people--The E-Government Act of 2001
(S. 803; Public Law 107-347). This legislation to promote
electronic government included a variety of important new
information management provisions that promoted the
government's use of the Internet and new information
technologies, and improved information dissemination,
information security, and training for information technology
workers. Laws mandating more rigorous financial management by
Federal agencies were reported by the Committee and enacted
into law (S. 2644 and H.R. 4685, Public Law 107-289; H.R. 4878,
Public Law 107-300). Provisions improving management of the
Federal workforce and providing for emergency procurement
flexibility passed as part of the Homeland Security Act of 2002
(Public Law 107-296; Title XIII and Title VIII, Subtitle F).
The Committee balanced these landmark legislative efforts
with important investigative and oversight work scrutinizing
the independence and effectiveness of those responsible for
overseeing the Nation's financial and energy markets, which
were scarred broadly and deeply by the scandalous collapse of
Enron Corporation in December 2001. In January 2002, Chairman
Lieberman and Ranking Minority Member Thompson launched a far-
reaching investigation into the role of these watchdogs in
Enron's implosion, with the goal of determining where the
system failed investors in order to prevent a similar debacle
from recurring. At the same time, Senators Levin and Collins,
through the Permanent Subcommittee on Investigations, conducted
a bipartisan investigation into issues related to the collapse
of Enron Corporation. The full Committee also conducted
extensive investigations into the Administration's rollback of
environmental regulations, and probed the energy markets,
election reform, DC voting rights, and a variety of other
issues.
HOMELAND SECURITY
In response to the devastating terrorist attacks of
September 11, 2001, the Committee engaged in a lengthy and
detailed oversight process into how to strengthen homeland
security. Informed by that process, Chairman Lieberman
introduced and moved through the Committee and to the Senate
floor legislation to create a new Department of Homeland
Security (S. 2452). The Homeland Security Act of 2002,
ultimately enacted as H.R. 5005, consolidates myriad agencies
with responsibilities for homeland security into a single
Department. As a result of this legislation, for the first time
a new Department will have as its primary mission defending the
American homeland against a variety of threats, the foremost of
which is terrorist attacks.
Beginning on September 12, 2001, the Committee held a total
of 19 hearings on homeland security. Four of the hearings
focused specifically on how government can best be organized to
meet the threat of terrorism on our homeland. The rest of the
hearings addressed particular homeland security concerns, and
also informed the process by which Chairman Lieberman and
others drafted and revised comprehensive legislation to create
a Department of Homeland Security. These hearings began on
September 12, 2001, with the first of three sessions on
critical infrastructure protection, and continued through June
26-28, 2002, with 2 days of hearings into the role of the
intelligence community in homeland security, and a third
hearing into protecting against weapons of mass destruction.
Other hearings addressed aviation security, bioterrorism, mail
safety, port security, the role of State and local governments
in homeland security, rail safety, and public health
preparedness.
The hearings on specific proposals for government
reorganizations began on September 21, 2001, when former
Senators Hart and Rudman described how their United States
Commission on National Security/21st Century, in a report
entitled ``Road Map for National Security: Imperative for
Change,'' had found that the government was woefully unprepared
for terrorist attacks, and recommended the creation of a new
Department to provide for a more coordinated defense against
attacks on United States territory. Soon after, on October 11,
2001, Senators Lieberman and Specter introduced legislation to
create a new Department (S. 1534), modeled after the Hart-
Rudman recommendations. At a hearing the next day, the
Committee examined this and other legislative proposals,
including one put forward by Senator Graham (S. 1449) to
establish a National Office for Combating Terrorism. At a third
hearing, on April 11, 2002, the Committee examined draft
legislation that synthesized and expanded upon the legislative
approaches taken in the Lieberman-Specter and Graham proposals.
The integrated bill, S. 2452, was ordered reported out of the
Committee on May 22, 2002, and reported to the Senate on June
24, 2002 (S. Rept. 107-175).
Before the Senate had a chance to consider the Committee's
homeland security bill, the President--in June 2002--drafted
proposed legislation to create a Department of Homeland
Security. At a hearing on June 20, 2002, the Committee compared
the President's proposal to the legislation the Committee had
already reported out (S. 2452). The Administration's bill
included almost all of S. 2452's organizational elements
regarding the Department but offered additional provisions,
such as allowing the Department's management to establish a new
personnel system, and turning over broad authority to the
Executive Branch in a number of areas, including appropriations
and reorganization of agencies and programs within the
Department. The Administration's bill also did not include a
statutory White House office on combating terrorism.
On July 24 and 25, 2002, the Committee held a business
meeting to consider an amended version of the Committee-
approved homeland security legislation that contained many of
the Administration's suggestions on organizational structure.
The business meeting also gave Committee members the
opportunity to offer and vote on a wide variety of amendments.
The Committee considered 40 first-degree amendments and adopted
31 of them. The modified version of S. 2452 was approved on a
bipartisan vote of 12-5; it became the basis for Senate floor
debate, which began in September 2002.
The legislation created a Department of Homeland Security
led by a Presidentially-appointed, Senate-confirmed Secretary
and divided into six major divisions or directorates. Each
directorate had a core mission of the Department: (1) shoring
up our borders and transportation system; (2) preparing for and
responding to emergencies; (3) protecting our infrastructure;
(4) fusing intelligence; (5) improving immigration security;
and (6) coordinating and promoting science and technology
research and development for homeland security. The bill
proposed to combine more than two dozen Federal agencies and
offices with homeland security missions, such as the Coast
Guard, the Customs Service, the Federal Emergency Management
Agency, the Transportation Security Administration, the border
inspection functions of the Department of Agriculture's Animal
and Plant Health Inspection Service, and several other critical
agencies and offices, into a unified cabinet-level Department.
It also included long-sought reforms of the Immigration and
Naturalization Service by creating a bureau of immigration
services and a bureau of enforcement and border affairs within
an overall immigration directorate. Finally, it incorporated
far-reaching bipartisan, consensus civil service reforms
drafted by Senators Voinovich and Akaka that require the
appointment of chief human capital officers, reform the
competitive hiring process, improve performance management
within the Senior Executive Service, and afford other tools for
improving human capital management government-wide.
In September and October of 2002, Chairman Lieberman and
Ranking Minority Member Thompson led the debate on the floor of
the Senate regarding many aspects of the Committee's
legislation. Among the most disputed issues were the
Administration's efforts to establish a new personnel system
for employees of the new Department, including a new system for
labor relations, and to seek new authorities in a number of
other managerial areas. The Administration believed that the
Secretary of the new Department needed flexibility to set the
rules regarding Department personnel, while others argued that
the Administration provisions would alter procedures and
remedies in a way that could undermine merit system principles
and were unrelated to national security needs. Other debate
centered around the inclusion in the legislation of a White
House Terrorism Office with a Senate-confirmed Director, and an
alternative amendment offered by Senator Byrd that would have
established the Department more gradually. Senators Gramm and
Miller offered their own version of the homeland security
legislation as an amendment. Repeated attempts to achieve
cloture on the legislation were unsuccessful.
On November 13, 2002, the House passed new legislation
(H.R. 5710) to establish a Department of Homeland Security that
included some of the Administration supported provisions on
personnel matters and other issues, although with some
significant modifications from the President's original June
18, 2002 proposal. The same day, the Senate tabled the
Committee-approved version of the homeland security legislation
on a 50-47 vote. Several days later, on November 19, 2002, the
Senate essentially adopted the text of H.R. 5710 and, after
more than 2 months of floor debate on the legislation, the
Senate passed the legislation to create a Department of
Homeland Security by a vote of 90-9. The House agreed to the
Senate amendment by unanimous consent on November 22, 2002.
President Bush signed the Homeland Security Act of 2002 (H.R.
5005) into law on November 25, 2002 (Public Law 107-296).
Although it contained alternative provisions on personnel
management and organizational authority, the version of H.R.
5005 that was ultimately enacted is very similar in its
organizational components to the legislation that was approved
by the Committee and will focus leadership and resources on key
areas for securing our homeland by creating directorates within
the Department for: (1) information analysis and infrastructure
protection; (2) border and transportation security; (3)
emergency preparedness and response; and (4) science and
technology. Other key elements of the Department include an
Office for State and Local Government Coordination, a separate
bureau for immigration and citizenship services, and officers
devoted to civil rights and civil liberties and to privacy.
Under this configuration, immigration, customs and agricultural
border inspectors for the first time will operate within a
single chain of command; diverse programs on cyber-security and
critical infrastructure protection will be coordinated within a
single directorate, which should also include an intelligence
fusion center to analyze all homeland threats; emergency
response programs will be coordinated with homeland security
planning; and a new science and technology capability will
advance the research and development agenda of the host of
agencies with homeland security missions. The Secretary of the
new Department will have authority to focus and lead the
Nation's homeland security efforts.
COMMISSION TO INVESTIGATE THE TERRORIST ATTACKS
Although the terrorist attacks of September 11, 2001 caused
tremendous carnage and loss of life, as of late 2002 no
official governmental inquiry had been established to
comprehensively examine the tragedy. This despite the fact that
such investigations are routinely conducted after plane crashes
and terrorist attacks against U.S. Government facilities.
On December 20, 2001, Senators Lieberman and McCain
introduced legislation calling for the establishment of an
independent inquiry to investigate the terrorist attacks of
September 11, 2001. The legislation, S. 1867, was referred to
the Committee. It required the creation of a non-partisan,
blue-ribbon commission to produce a definitive report detailing
how our government failed to detect the plot and protect the
homeland, and recommending how our Nation's defenses against
terrorism could be improved. The proposal set a broad scope for
the Commission, extending its jurisdiction to all relevant
areas, including the private sector and State and local
governments. It gave the Commission subpoena power, and
required it to report its findings within 18 months.
On February 7, 2002, Chairman Lieberman held a Committee
hearing on the commission legislation. Four witnesses, who had
served on past commissions, testified in support of the bill.
On March 21, 2002, the Committee unanimously ordered the bill
reported to the full Senate. On September 24, 2002, the Senate
overwhelmingly voted to create a commission as an amendment to
the Homeland Security legislation; earlier, the House of
Representatives had voted for a narrower inquiry as part of
intelligence reauthorization legislation. In conference, the
House and Senate Intelligence Committees agreed to establish a
commission similar to the version that had passed the Senate,
as part of the Intelligence Reauthorization Act (Public Law
107-306). The legislation was enacted on November 27, 2002. The
Commission, led by Chairman Thomas Kean and Vice-Chair Lee
Hamilton, began its work in January 2003.
E-GOVERNMENT AND INFORMATION RESOURCES MANAGEMENT
The 107th Congress passed important new legislation to
promote next generation government. The passage of Chairman
Lieberman's ``E-Government Act of 2002'' represented the
culmination of 3 years of work by the Committee. The
legislation will improve the organization and delivery of
information and services over the Internet, and will establish
a new information resources management framework to transform
the way government operates.
Senator Lieberman introduced the E-Government Act of 2001
(S. 803) on May 1, 2001. The Committee held a hearing on the
legislation on July 11, 2001. On March 21, 2002, the Committee
unanimously ordered reported an amended version, and the bill
passed the Senate by unanimous consent on June 27, 2002. In
September, the House Government Reform Committee began to
consider the legislation; an agreement was reached between the
House and Senate Committees in which several provisions were
added, but the original Senate provisions were left intact. The
revised legislation passed the House and Senate as H.R. 2458 on
November 15, 2002; the President signed it on December 17, 2002
(Public Law 107-347).
The E-Government Act of 2002, among other things, creates
an Office of Electronic Government within OMB headed by a
Presidentially-appointed Administrator, to provide focused, top
level-leadership on e-government and information technology
issues. The Administrator will allocate money from a
substantial E-Government Fund to support interagency projects
and other innovative programs. The Act requires that
information and services on the Internet be organized according
to citizens' needs, rather than agency jurisdiction, and
accessible from a single point, or portal. Several provisions
require that government information be better organized and
made more easily searchable.
Sweeping new privacy protections require government
officials to consider privacy ramifications when developing
information technology systems or beginning information
collections. Federal agencies are required to post their
website privacy policies in machine readable formats, making it
easier for individuals' Internet browsers to access and screen
them. The privacy provisions represent one of the most
significant expansions of individuals' privacy protections
since the passage of the 1974 Privacy Act.
The Act also addresses an impending shortage of skilled
information technology professionals in the Federal workforce;
requires agencies to conduct their rule-making online; and
directs courts to post their judicial opinions and other
information online.
The Act authorizes and makes permanent the information
security provisions originally authored by Senators Thompson
and Lieberman in the 106th Congress (Public Law No. 106-398);
the provisions appearing in the final bill were expanded upon
with the addition of House legislation, the Federal Information
Security Management Act. The Act also improves Federal agency
information security by authorizing funds for the development
of a Federal bridge certification authority for digital
signature compatibility.
The Act includes a modified version of the ``Digital Tech
Corps Act of 2002,'' introduced in the Senate by Senator
Voinovich (S. 1913) and in the House by Representative Tom
Davis (H.R. 3925) (first introduced as H.R. 2678, then as H.R.
3925). The provision authorizes the exchange of information
technology workers between the private sector and Federal
Government agencies. Other language added by the House included
an expansion of share-in-savings contracting authority, and an
authorization for State and local governments to purchase
information technology off the Federal supply schedule.
THE COLLAPSE OF ENRON CORPORATION
On December 2, 2001, Enron Corp., then ranked as America's
seventh largest company, filed for bankruptcy amid allegations
of wide-ranging fraud. The collapse of the company left
thousands of employees without jobs; it also erased billions of
dollars of savings for many of those employees and many more
investors. Enron's collapse, moreover, triggered a crisis of
confidence in the U.S. financial markets, which was sustained
by the parade of corporate debacles that followed--WorldCom,
Global Crossing, and Tyco, among others.
In January 2002, the Committee began a broad investigation
into Enron's failure. Specifically, the Committee examined a
variety of government and private entities with responsibility
for overseeing or monitoring aspects of Enron's activities and
protecting the public against the type of disaster that
resulted. The Chairman asked Committee staff to determine
whether these watchdogs could have done anything to prevent, or
at least detect earlier, the problems that led to Enron's
collapse.
At the same time, the Committee's Permanent Subcommittee on
Investigations undertook a parallel investigation into how
Enron was governed and the accounting ploys and other
mechanisms it had used to improve the appearance of its
financial statements. In particular, the Subcommittee looked at
the role of Enron's Board of Directors in the company's
collapse and at the ways in which certain large financial
institutions assisted Enron in structuring questionable, highly
complex transactions designed to hide debt and to increase the
appearance of the company's revenues.
Starting in February 2002, the Committee sought information
from a number of government agencies about their contacts with
and oversight of Enron, including the Securities and Exchange
Commission, the Federal Energy Regulatory Commission (FERC),
the Commodity Futures Trading Commission, the Department of
Labor, the Department of Energy and the Commerce Department.
The Committee also requested information regarding contacts
with Enron from the ten agencies whose leaders served as
members of the National Energy Policy Task Force headed by Vice
President Cheney. In addition, the Committee requested
information from the Archivist of the United States regarding
contacts with Enron by prior White House administrations, going
back to January 1, 1992. The Committee sought similar
information from the current White House; when it was not
forthcoming, the Committee subpoenaed the materials containing
that information on May 22, 2002. On the same date the
subpoenas were issued, the White House provided the Committee
with, and for the first time made public, an extensive list of
contacts between Enron officials and the staffs of the
Executive Office of the President and the Office of the Vice
President. The Committee also subpoenaed documents from Enron,
current and former directors of Enron, and Enron's auditor
Arthur Andersen regarding, among other things, Enron's contacts
with the government.
As part of its investigation, the Committee held a series
of hearings that looked at the actions of certain private and
public watchdogs with respect to Enron, as well as at issues
arising out of the disastrous effect that Enron's collapse had
on its employees' 401(k) retirement plans.
In addition, Chairman Lieberman and Ranking Minority Member
Thompson released a number of staff reports on various aspects
of the Committee's investigation. The first of those was a 101-
page report prepared by Committee staff (Financial Oversight of
Enron: The SEC and Private-Sector Watchdogs, S. Prt. 107-75
(October 7, 2002)) that set forth a summary of findings and
recommendations relating to the Committee's investigation of
both public and private sector financial oversight of Enron,
particularly by the SEC, the stock analysts, and the credit
rating agencies. The report detailed a story of systemic
failure by the watchdogs relied upon by the public to properly
discharge their appointed roles. The report concluded that,
despite the magnitude of Enron's implosion and the apparent
pervasiveness of its fraudulent conduct, virtually no one in
the multilayered system of controls that the public relies upon
detected Enron's malfeasance, or, if they did detect it, did
anything to alert investors or correct the problems. The report
included specific recommendations to the SEC.
The SEC. Staff found that the SEC failed to review
Enron's filings consistently or thoroughly and that, if the
Commission had done so, it might have raised red flags about
some of the company's most troubling transactions. The report
also found that the SEC staff had made administrative
determinations that allowed Enron to engage in certain
accounting practices and exempted the company from certain
regulatory requirements. The SEC then failed to monitor whether
Enron was abiding by conditions the SEC set in making these
allowances, and failed to check to see if the circumstances
that warranted the exemption had changed. The report called
upon the SEC to improve its performance by being more diligent
and consistent in reviewing corporate filings, devising
effective criteria to root out financial fraud, and leveraging
technology to better achieve this goal. The report also
recommended the SEC make further efforts to follow up on its
own administrative orders, grants and exemptions to ensure that
they are being complied with and that they remain warranted.
Stock Analysts. The report examined how stock analysts
could have continued to recommend Enron's stock to investors
until the company's end. The report concluded that Wall Street
analysts are subject to too many pressures and conflicts to
offer the objective and hard-hitting analyses that the
investing public demands of them. The most significant source
of pressure on analysts is the investment banking relationship
between the companies they cover and the firms for which they
work; Enron, in particular, was an active customer of
investment banking services, and in at least one case appears
to have used the threat of withdrawing that business to produce
a better rating from an analyst than it would otherwise have
received. The report recommended, among other reforms, that the
SEC tighten regulatory requirements for stock analysts,
mandating that they be entirely separated and insulated from
the contaminating influence of the investment banking interests
of the firms for which they work.
Credit Rating Agencies. The report also looked into how
credit rating agencies could have kept Enron's credit rating at
investment grade--meaning a safe investment--until just 4 days
before Enron declared bankruptcy. The report found that credit
rating agencies failed to leverage their power and access to
benefit investors. The rating agencies appeared to take at face
value whatever Enron told them, and did not probe for more
information when Enron's silence concealed potentially damaging
facts. The report recommended that the SEC set standards for
the rating agencies' work, monitor to ensure that they operate
in compliance with those standards, and then investigate when
ratings significantly understate risks, as in the case of
Enron.
On November 12, 2002, Chairman Lieberman also released a
Majority staff memorandum addressing FERC's failure to monitor
aggressively the deregulated energy markets that Enron
allegedly abused, in conjunction with the Committee's hearing
on that topic (Asleep at the Switch: FERC's Oversight of Enron
Corporation, Hearing Before the Senate Governmental Affairs
Committee, (S. Hrg. 107-854, November 12, 2002, Vol. I at p.
220).) The Majority staff memorandum found that FERC repeatedly
failed to ask critical questions about Enron's business
practices--questions that might have exposed the fissures in
Enron's fiscal foundation sooner, limited some of the abuses
that occurred, raised larger questions about Enron's trading
practices, and spared investors, employees, and consumers some
of the pain they later endured. The report found a shocking
absence of regulatory vigilance on FERC's part and a failure to
structure the agency to meet the demands of the new, market-
based system that the agency itself had championed. The
investigation revealed that FERC did not fulfill its role to
protect consumers against abuses that can result if a market-
based system is not adequately regulated by those charged with
doing so. Specifically, the investigation looked at four areas
in which FERC had failed to adequately oversee Enron Corp.:
Wind Farm Transactions. The investigation uncovered a
number of misdeeds in connection with certain wind farms owned
by Enron. Under Federal law, the wind farms were potentially
eligible for special rate treatment--that is, consumers could
be charged a higher price for the electricity they generated,
but only if the wind farms were not owned by a public utility
or any owner of a public utility--which Enron was. Enron filed
documents with FERC asserting, first, that it had sold 50
percent of its interests in the wind farms, and, later, that it
qualified for an exemption from the law. Although both
assertions turned out to be untrue (among other things, the
sales of Enron's interests turned out largely to be sham
sales), FERC never scrutinized Enron's filings to see if the
claims were supported. Instead FERC let Enron continue to
charge the higher, preferential rates. Only after the
Committee's investigation did FERC open its own investigation
into the wind farms--which ultimately led to a settlement that
will return over $50 million to California ratepayers.
Enron Online. In May 2001--7 months before Enron
declared bankruptcy--FERC staff conducted an investigation into
Enron Online, Enron's electronic trading platform. The inquiry
included an examination of the competitive advantage Enron
Online provided Enron traders and whether that advantage could
be used by Enron to gain an unfair advantage in the
marketplace. But the Committee staff's report found that while
FERC staff members asked some of the right questions, they
failed to follow up on some of the most serious concerns raised
and ultimately settled for incomplete, unconvincing or
incorrect answers. It was not until March 2003--well after
Enron's collapse--that FERC issued a staff report concluding
that Enron had in fact used Enron Online to manipulate the
Western energy markets and make significant additional profits
for the company.
Affiliate Transactions. Enron engaged in a number of
inappropriate transactions among its many affiliates. In
perhaps the most striking of these interaffiliate transactions,
Enron, shortly before its collapse, borrowed $1 billion through
two of its pipeline subsidiaries. The FERC-regulated pipelines
subsidiaries secured the loans with their assets and in turn
made unsecured loans to the parent company. When Enron declared
bankruptcy, the pipeline companies (which did not themselves
file for bankruptcy) were left to pay off the debt, with
significant potential consequences for their ratepayers. A
subsequent investigation, begun some months later by FERC,
challenged the right of the pipelines to pass these costs on to
their ratepayers, but the Committee staff's report showed that
FERC's modest regulation in this area had failed to prevent
these and other questionable transactions from occurring in the
first place.
Abusive Trading Practices During the Western Energy
Crisis. Publicly released documents show that Enron traders
engaged in abusive trading practices designed to manipulate the
market during the 2000-2001 Western energy crisis. The
Committee's investigation found that FERC, however, waited 2
years after the first allegations of market abuse arose--and
until after Enron's collapse--before beginning a formal inquiry
into the potentially abusive actions of individual companies.
The majority staff further found that this action came at the
same time that Enron, concerned about the future of energy
deregulation, was conducting an extensive public relations and
lobbying campaign to influence FERC's actions in California and
the Western markets. It was not until March 2003 that FERC
finally released a staff report concluding that Enron and a
number of other energy companies had in fact manipulated the
Western markets.
In sum, the majority staff's report found that FERC had
displayed a shocking absence of regulatory vigilance in its
oversight of Enron. Based on its findings, the Majority staff
recommended that FERC take significant steps to restructure and
reorient the agency to more effectively oversee the new
competitive markets it has championed, including reorienting
its mission toward more proactive oversight and enforcement;
reallocating its resources toward monitoring and policing the
energy markets; making coordination with other agencies an
institutional priority; and improving its internal
communication and coordination practices.
Ranking Minority Member Thompson released minority views on
FERC and its oversight of Enron Corp. (November 12, 2002) (S.
Hrg. 107-854, Vol. IV at p. 682). The minority views asserted
that, while FERC may have had a previous record of failure, a
number of positive developments had occurred at the agency
since the current FERC Chairman had taken office 18 months
earlier. These actions included proposed rules for regulating a
deregulated, market-based system, and the creation of an office
of market oversight and investigation--designed to prevent a
recurrence of the problems highlighted by the Enron debacle.
Finally, on January 3, 2003, Chairman Lieberman and Ranking
Minority Member Thompson released a staff report on the
Committee's staff investigation into concerns about telephone
calls made by certain banks to governmental officials,
purportedly in an effort to obtain government intervention with
the Moody's credit rating agency, which was threatening to
downgrade Enron's credit rating in early November 2001 (Enron's
Credit Rating: Enron's Bankers' Contacts with Moody's and
Government Officials, Report of the Staff of the Senate
Committee on Governmental Affairs, S. Prt. 107-83). The report
concluded that no improper influence was brought to bear by
government officials on Moody's, and that the bankers who
contacted government officials regarding Enron and its credit
rating did not act contrary to law.
GOVERNMENT ORGANIZATION
The Committee continued to review proposals relevant to the
organization of the Federal Government. Two of the proposals
considered in the 107th Congress related to the government's
structure of offices and agencies dedicated to environmental
protection.
The Committee debated and endorsed a significant measure to
strengthen the Federal Government's efforts to combat global
climate change. ``Climate Change Strategy and Technology
Innovation Act of 2001'' (S. 1008) was introduced June 8, 2001
by Senator Byrd and co-sponsored by Senators Stevens,
Rockefeller, Collins, Reid, Lieberman, Nelson, Voinovich,
DeWine, Durbin, and Kerry; the bill was referred to the
Committee. The legislation would have created an Office on
Climate Change within the White House and required the office
to prepare a detailed strategy to stabilize the concentration
of greenhouse gasses in the atmosphere. The legislation also
sought to create a new office within the Department of Energy,
with new funding, to research and develop technologies to
combat climate change. As Senator Byrd stated, ``the
legislation would establish a regime of responsibility and
accountability in the Federal sector for the development of a
national climate change response strategy.'' (Congressional
Record, June 8, 2001, at S 6002)
At a July 18, 2001 hearing, the Committee heard testimony
about the growing threat of climate change and the need for a
more unified and active effort by the Federal Government to
combat this threat. The Committee subsequently approved the
legislation by voice vote on August 2, 2001. S. 1008 did not
progress further in the 107th Congress. A similar version of
the legislation was approved by the Senate as part of omnibus
energy legislation (S. 517); however, that omnibus energy
package did not become law.
The Committee also held a hearing on July 24, 2001, to
consider legislation, introduced by Senator Boxer, and
cosponsored by Senator Collins and Senator Lieberman, among
others, to elevate the Environmental Protection Agency to a
Cabinet-level Department (S. 159).
REGULATORY OVERSIGHT
Investigation and Report on Regulatory Rollbacks: As part
of the Committee's implementation of its mandate to oversee the
efficiency and economy of all branches and functions of
government, with particular references to the operations and
management of Federal regulatory policies and programs,
Chairman Lieberman requested information and documents from the
Environmental Protection Agency (EPA) and the Departments of
the Interior (DOI) and Agriculture (USDA) regarding their
consideration of the possibility of delaying, suspending,
rescinding or otherwise modifying three finalized regulations.
Following receipt of this information, the Majority staff
prepared a report for the Chairman, entitled ``Rewriting the
Rules,'' (S. Prt. 107-76, October 24, 2002).
The report reviewed the effect of a memo issued by White
House Chief of Staff Andrew Card, directing Federal agencies to
hold in abeyance recently issued regulations until they could
be reviewed by Bush administration political appointees. In
particular, it examined the so-called Card memo's impact on
three important environmental rules finalized before the Bush
Administration came into office: (1) the USDA's rule conserving
roadless areas in national forests; (2) the DOI's rule
regulating hard rock mining on public lands; and (3) the EPA's
rule capping the permissible level of arsenic in drinking
water.
The report was critical of the failure of the agencies to
comply with the notice and comment requirements of the
Administrative Procedure Act in delaying the rules. Based on a
review of agency documents, the staff further concluded that
decisions to revisit the three rules at issue appeared based on
pre-determined decisions regarding the regulations rather than
a documented, close analysis of the rules or the agency's basis
for issuing them. With regard to the rule protecting roadless
areas in national forests, the staff report concluded that USDA
used a third-party lawsuit to undermine the rule without taking
public responsibility for its actions. The staff report
concluded that DOI's decision to suspend parts of the hard rock
mining rule will allow mining projects that pose unwarranted
environmental and health threats to continue. The staff report
also concluded that EPA conducted a time-consuming and
unnecessary review of a decades-in-the-making rule limiting
arsenic in drinking water. Although the EPA Administrator had
stated concerns about ``sound-bite rulemaking,'' EPA documents
generated prior to her announcement that the rule would be
changed reflected no visible comprehensive analysis, work
product, or narrative identifying the nature of the
deficiencies in the science supporting the rule.
The report also noted that the agencies planned further
changes in each of these rules. Accordingly, the report raised
the concern that any further actions undertaken by the agencies
must be in full compliance with the spirit and the letter of
the law and must not further erode environmental protections or
rulemaking procedures.
Hearings on Environmental Oversight and Legislation: The
Committee held 2 days of hearings, on March 7 and 13 of 2002,
to examine the Administration's implementation of environmental
laws. Witnesses included EPA Administrator Christine Todd
Whitman, Connecticut Attorney General Richard Blumenthal,
former Director of the Office of Regulatory Enforcement at EPA
Eric V. Schaeffer, and academics and policy advocates involved
with environmental issues. Several of the witnesses questioned
the Administration's commitment to vigorous environmental
enforcement, or spoke from personal experience of the harm they
had witnessed from specific acts of environmental degradation.
EPA's Administrator Whitman testified on behalf of the
Administration. She called for greater bipartisan cooperation
on environmental policy, and described the Administration's
Clear Skies proposal, which she testified was aimed at
achieving reductions in several air pollutants emitted by power
plants.
GOVERNMENT WORKFORCE IMPROVEMENTS
The Committee reported out, and Congress enacted, a
significant number of laws and provisions related to improving
management of the government workforce, maintaining high
ethical standards and merit system principles, and enhancing
benefits for government workers.
Strengthening Management of Human Capital: Legislation
intended to improve management of the Federal workforce (S.
2651) was introduced by Senator Voinovich and referred to the
International Security, Proliferation and Federal Services
Subcommittee, which held 2 days of hearings. After Senators
Voinovich and Akaka negotiated an agreed-upon text, several of
the provisions were then endorsed by the Committee for
incorporation into the Homeland Security Act of 2002, which
Congress enacted (Public Law 107-296; Sec. Sec. 1301-1332).
These measures include a requirement that each agency have a
Chief Human Capital Officer, a loosening of strictures on the
hiring of employees, enhanced authority to grant early
retirement or retirement incentive pay, the inclusion of human
capital strategic planning in agencies' performance plans, and
reforms relating to the Senior Executive Service.
Securing Merit System Principles: The Committee reported
out a bill to reauthorize the Merit Systems Protection Board
(MSPB) and the Office of Special Counsel (OSC) (S. 3070). The
bill, which was introduced by Senator Akaka, was subsequently
incorporated into other legislation and enacted into law
(enacted as H.R. 3340; Public Law 107-304). The MSPB and OSC
administer programs and procedures to safeguard the Federal
Government's merit-based system of employment, and to protect
Federal employees against improper personnel practices,
particularly regarding employees who step forward to disclose
government waste, fraud and abuse.
Maintaining High Ethical Standards: The Committee reported
out, and Congress enacted, a bill reauthorizing the Office of
Government Ethics, an agency established by the Ethics in
Government Act of 1978 to help foster high ethical standards
for employees in the Executive Branch (introduced as S. 1202;
Public Law 107-119). The bill was introduced by Chairman
Lieberman and cosponsored by Ranking Minority Member Thompson.
Deferred Mandatory Retirement for Firefighters: The
Committee reported out, and Congress enacted, a bill raising
the mandatory separation age for Federal fire fighters from 55
to 57, which is the age that now applies for Federal law
enforcement officers. This measure will enable willing and able
Federal fire fighters to continue to serve, and will remove the
existing inequity that requires firefighters to retire younger
than law enforcement officers (introduced in the Senate as S.
271, enacted as H.R. 93; Public Law 107-27).
Enhanced Benefits for Federal Government Workers: A number
of bills reported by the Committee and ultimately enacted into
law enhanced employment benefits available to Federal workers.
These include legislation allowing military personnel and
civilian employees to make use of promotional benefits, such as
frequent flyer miles, that they receive as a result of official
government travel (introduced as S. 1498, enacted as part of
Public Law 107-107); authorizing Federal employees who
participate in the Thrift Savings Plan and who are over 50
years old to take advantage of ``catch-up'' contributions, thus
allowing the Federal Government's tax-deferred plan to do what
private sector plans may already choose to do (introduced as S.
1822, enacted as part of H.R. 3340; Public Law 107-304); and
enhancing the Federal Long-Term Care Insurance program to--(1)
exempt premiums from State and local taxes, and (2) expand
coverage to include retired Federal employees who are not yet
receiving an annuity but are entitled to a deferred annuity
(H.R. 2559; Public Law 107-104).
Law Enforcement Powers for Inspector General Agents: The
Committee reported out legislation, introduced by Ranking
Minority Member Thompson and co-sponsored by Chairman
Lieberman, to provide law enforcement powers to Inspector
General Agents (S. 2530). The legislation was enacted as part
of the Homeland Security Act of 2002 (Public Law 107-296;
Sec. 812).
Notification and Federal Employee Antidiscrimination and
Retaliation Act: The Committee reported out legislation that
holds Federal agencies accountable for violations of
discrimination and whistleblower protection laws. The
legislation, originally introduced in the House by
Representative Sensenbrenner and in the Senate by Senator
Warner, was enacted into law (H.R. 169; Public Law 107-174).
FINANCIAL MANAGEMENT
The Committee passed important legislation strengthening
and expanding financial management reforms for Federal
agencies.
Expanded Federal Financial Audits: The Committee reported
out, and Congress enacted, legislation to expand the category
of Federal agencies that are required to prepare audited
financial statements each year. Prior to the introduction of
this bill, only the 24 major departments and agencies were
required by law to do so. In the years since the 1994
Government Management Reform Act mandated the preparation of
audited financial statements by the 24 agencies, the financial
statements of the affected agencies have shown marked
improvements. The legislation, introduced by Senator Fitzgerald
as S. 2644 and passed as H.R. 4685, requires all Federal
agencies to prepare annual financial statements, except that
the OMB Director is authorized to exempt certain very small
agencies (Public Law 107-289).
Reducing Improper Payments: The Committee reported, and
Congress enacted, legislation originating in the House of
Representatives intended to reduce the billions of dollars in
improper payments made by Federal agencies each year. The
General Accounting Office (GAO) has reported that improper
payments of between $19 billion and $20.7 billion were made in
fiscal years 1999, 2000, and 2001. In October 2001, the GAO
issued an Executive Guide prepared at Chairman Lieberman's
request, that provided best practices recommendations for
agencies to reduce improper payments. Building on these
recommendations, H.R. 4878 requires Federal agencies to
identify programs that are vulnerable to improper payments and
to estimate annually the amount of underpayments and
overpayments made by these programs. Agencies must also report
on the steps they are taking to reduce improper payments for
each program with estimated improper payments that exceed $10
million (Public Law 107-300).
SMALL BUSINESS PAPERWORK RELIEF
The Committee reported out legislation, introduced by
Senator Voinovich, designed to aid small businesses in
complying with Federal information collection requirements and
to reduce the paperwork burdens on such companies (S. 1271).
The legislation was enacted as H.R. 327 (Public Law 107-198).
PUBLIC HEALTH AND SAFETY
The Committee held several hearings examining the Nation's
public health and safety, particularly as it affects our youth.
The hearings focused on the ill effects of drug and alcohol
abuse among children and teens, and on child vaccine shortages.
Ecstasy: The Law Enforcement Response: On July 30, 2001 the
Committee held a hearing on the government's response to the
ecstasy epidemic. The hearing examined how law enforcement at
the local, State, and Federal levels was reacting to the rise
in use of this club drug and whether the programs and
initiatives designed to control the epidemic were having the
desired effect.
Binge Drinking on College Campuses: On May 15, 2002, a
Committee hearing examined evidence of an epidemic of binge
drinking on college campuses, including a comprehensive new
study finding that the culture of drinking on college campuses
is more damaging and deadly than previously recognized.
Child Vaccine Shortages: On June 12, 2002, the Committee
reviewed the shortages of childhood vaccines for significant
diseases. Witnesses discussed the consequences of failing to
address the problem, and potential solutions.
ELECTION REFORM
In May 2001, the Committee held 2 days of hearings on
Federal election practices. The hearings explored the flaws in
the Nation's voting system, including those that marred the
2000 elections, and examined possible solutions. Recent
elections have demonstrated that States continue to have
difficulties ensuring a fair and orderly election process for a
variety of reasons; these included inaccurate voter
registration rolls, faulty voting equipment, and poorly trained
poll workers.
ENERGY DEREGULATION
In June 2001, the Committee held a series of three hearings
to examine the potential adverse consequences of energy
deregulation, especially in the absence of adequate
governmental oversight. The Committee began with an examination
of California's troubled transition to a market-based utility
system, and probed from an economic perspective the proper role
of Federal regulators when the attempts to develop an open
market fail. The Committee then focused more explicitly on the
actions and inactions of FERC in responding to power outages
and massive price increases experienced by California and other
Western States. The final hearing examined the impact of
deregulation of the electricity industry on the reliability of
the electric grid.
FINANCIAL DISCLOSURE FOR PRESIDENTIAL NOMINEES
Presidential nominees frequently complain of the lengthy
and unwieldy financial disclosure process they must undergo in
order to accept Executive Branch appointments. Many see the
problem as deterring qualified individuals from entering
government. Following 2 days of hearings, Ranking Minority
Member Thompson and Chairman Lieberman introduced legislation
to streamline the financial disclosure process for nominees,
while strengthening the public's right to know by making it
easier to track waivers of conflicts of interest. The
legislation, S. 1811, was reported out of Committee on May 16,
2002. The Committee also produced a multi-volume compilation of
past commission reports on the financial disclosure process.
D.C. LEGISLATION
The Committee engaged in a number of oversight and
legislative activities regarding the organization of the
government of the District of Columbia, and the status and
rights of its residents. Some of the key issues and legislation
are described here.
Voting Representation: In May 2002, the Committee held a
hearing into whether citizens of Washington D.C. should be
granted full voting representation in Congress. Proponents of
voting rights testified that D.C. residents share the same
burdens of citizenship as residents of other States, and are
therefore entitled to the same voting representation. Chairman
Lieberman subsequently introduced legislation to provide full
voting representation in Congress to the residents of the
District of Columbia. The bill, S. 3054, was reported out of
Committee on October 9, 2002.
D.C. College Access Improvement: The Committee considered
and reported out House legislation to expand the District of
Columbia Tuition Assistance Grant program. The legislation
extended the educational grants to allow DC residents to attend
Historically Black Colleges, and it widened the pool of
residents eligible for the grants. The bill, H.R. 1499, was
enacted on April 4, 2002 (Public Law 107-157).
D.C. Family Court Reorganization: The Committee considered
and reported out legislation to restructure the District of
Columbia Family Court. The reorganization will promote the
recruitment of experienced family law judges, extend their
terms, and ensure consistency in the assignment of judges. The
legislation was introduced in the House by Representative Tom
DeLay (R-Tex.) (H.R. 2657) and in the Senate by Senator DeWine
(S. 1382); both bills were reported out, with an amendment in
the nature of a substitute, by the Committee, and the House
bill was enacted on January 8, 2002 (Public Law 107-114).
EXPORT CONTROLS
On March 15, 2001, the Committee held a hearing to examine
changes in export control policy regarding high performance
computers. The hearing, based on a report released by the GAO,
focused on computers that could potentially be used for
military purposes by countries responsible for proliferation of
weapons of mass destruction.
MONITORING, ACCOUNTABILITY AND COMPETITION IN THE FEDERAL AND SERVICE
CONTRACT WORKFORCE
On March 6, 2002, the Committee held a hearing to review
the Administration's initiatives to increase the outsourcing of
Federal services to the private sector, and how outsourcing
affects the quality and cost of work performed for and by the
Federal Government. The hearing focused on the Administration's
efforts to impose numerical goals to increase competitions and
conversions of Federal jobs, and on proposed legislation to
allow Federal workers to compete more frequently for jobs being
outsourced.
ENTERTAINMENT RATINGS
On July 25, 2001, the Committee examined criticisms that
the entertainment industry's systems for rating media products
are not sufficiently reliable, visible, or understandable, and
generally provide parents with insufficient information about
content to allow them to make a knowledgeable choice for their
children. The Committee considered the merits of switching to a
uniform rating system, monitored by an independent oversight
committee and grounded in research.
II. Committee Jurisdiction
Rule XXV(1)(k) of the Standing Rules of the Senate requires
reference to this Committee of all proposed legislation, and
other matters, dealing with (1) archives of the United States;
(2) budget and accounting measures, other than appropriations,
except as provided in the Congressional Act of 1974; (3) census
and collection of statistics, including social and economic
statistics; (4) congressional organization, except for matters
which amend the rules or orders of the Senate; (5) Federal
civil service; (6) government information; (7)
intergovernmental relations; (8) municipal affairs of the
District of Columbia; (9) organization and management of the
U.S. nuclear export policy; (10) organization and
reorganization of the Executive Branch of the government; (11)
Postal Service; and (12) status of officers and employees of
the United States including their classification, compensation,
and benefits.
The Committee is further authorized and directed to (1)
receive and examine reports of the Comptroller General of the
United States and submit to the Senate such recommendations as
the Committee deems advisable; (2) study the efficiency,
economy, and effectiveness of all agencies and departments of
the government; (3) evaluate the effects of laws enacted to
reorganize the Legislative and Executive Branches of
government; and (4) study the intergovernmental relations
between the United States and international organizations of
which the United States is a member.
In addition, the Committee has primary oversight and
legislative jurisdiction over the GAO, the Office of Personnel
Management, and the General Service Administration, and
processes all legislation relating to the disposal and the
negotiated sales of Federal surplus property.
With respect to investigations, the Committee is authorized
to study or investigate: (1) the efficiency and economy of
operations of all branches of the government; (2) the extent to
which criminal or other improper practices or activities are,
or have been, engaged in the field of labor-management
relations; (3) organized criminal activity related to
interstate or international commerce; (4) all other aspects of
crime and lawlessness within the United States which have an
impact upon or affect the national health, welfare, and safety;
(5) the efficiency and economy of operations of all branches of
the government with particular reference to certain national
security concerns; (6) the efficiency, economy, and
effectiveness of all agencies and departments involved in the
control and management of energy shortages; (7) the efficiency
and economy of all branches and functions of government with
particular references to the operations and management of
Federal regulatory policies and programs (S. Res. 54,
Authorizing Expenditures by the Committees of the Senate for
the Periods March 1, 2003, Through September 30, 2001, October
1, 2001, Through September 30, 2002, and October 1, 2002,
Through February 28, 2003 Sec. 11, 147 Cong. Rec. S 2089 (daily
ed. Mar. 8, 2001)).
III. Bills and Resolutions Referred and Considered
During the 107th Congress, 140 Senate bills and 61 House
bills were referred to the Committee for consideration. Also,
10 Senate Resolutions, 8 Senate Concurrent Resolutions and 2
House Concurrent Resolutions were referred to the Committee. Of
the legislation received and considered, 87 bills and
resolutions were reported and 80 were enacted into law.
However, not all of the measures that became law did so in the
form in which they were considered by the Committee--some were
enacted as part of other bills, sometimes in revised form.
Moreover, not all of the 80 measures that were enacted were
actually reported by the Committee.
IV. Hearings
During the 107th Congress, the Committee and its three
Subcommittees held a total of 114 hearings on legislation, a
wide variety of oversight issues, and nominations. The
Committee also held 13 business meetings. At the full Committee
level, a number of important topics were examined, including:
HOMELAND SECURITY
In the wake of the September 11, 2001 terrorist attacks,
the Committee held 19 hearings on homeland security, in
addition to hearings held by Subcommittees. Four of these
hearings, held on September 21, 2001, October 12, 2001, April
11, 2002, and June 20, 2002, focused specifically on how
government can best be organized to meet the threat of
terrorism to our homeland. The other fifteen hearings addressed
particular homeland security concerns, and also included
consideration of organizational issues as they related to those
topics. The areas covered by those hearings were: Critical
infrastructure protection (September 12, 2001, October 4, 2001,
and May 8, 2002), aviation safety (September 25, 2001 and
November 14, 2001), bioterrorism (October 17, 2001), mail
safety (October 30 and 31, 2001), port security (December 6,
2001), the role of State and local government in homeland
security (December 11, 2001), rail safety (December 13, 2001),
public health preparedness (April 18, 2002), the role of the
intelligence community in homeland security (June 26 and 27,
2002), and protecting against weapons of mass destruction (June
28, 2002).
Hearings on Reorganizing the Government's Response to Terrorism
Prior to the September 11 attacks, two reports were issued
that advocated the need for more coordination in the Federal
Government on preparedness and response to terrorism. The
findings and recommendations of these reports were examined in
the Committee's September 21, 2001 hearing, entitled
``Responding to Homeland Threats: Is Our Government Organized
for the Challenge?'' Witnesses included former Senators Gary
Hart and Warren B. Rudman, co-chairs of the U.S. Commission on
National Security/21st Century (commonly referred to as the
Hart-Rudman Commission); then-Governor James S. Gilmore, III,
of Virginia, chairman of the Advisory Panel to Assess the
Capabilities for Domestic Response to Terrorism Involving
Weapons of Mass Destruction (commonly referred to as the
Gilmore Commission); L. Paul Bremer, III, former Ambassador-at-
Large for Counter-Terrorism, U.S. Department of State, and a
member of the Gilmore Commission; and David M. Walker,
Comptroller General, U.S. General Accounting Office. Although
these witnesses had differing views on whether a new Department
or a White House Office was the better course for addressing
the country's homeland security needs, they agreed that better
coordination of existing agencies and authorities was
necessary.
On October 12, 2001, the Committee held a second hearing on
``Legislative Options to Strengthen Homeland Defense.'' This
hearing focused on two bills: The Lieberman-Specter S. 1534,
which was introduced to create a Department of National
Homeland Security, and Senator Graham's S. 1449, which sought
to establish a National Office for Combating Terrorism in the
White House. Witnesses included a bipartisan group of Members
who were major sponsors of these and other bills to improve the
way government is organized for homeland defense: Senator Bob
Graham (D-FL), Senator Bob Smith (R-NH), Senator Arlen Specter
(R-PA), Representative Wayne T. Gilchrest (R-MD),
Representative Jane Harman (D-CA), and Representative William
``Mac'' Thornberry (R-TX). These witnesses all agreed that
significant change was necessary to overcome existing turf
battles between agencies and to improve cooperation and
coordination across government in the fight against terrorism.
They also generally agreed that Tom Ridge, the newly appointed
director of the Office of Homeland Security, did not have
sufficient authority to get this job done.
The non-member witnesses at the October 12, 2001 hearing
were: Former U.S. Representative Lee H. Hamilton, who was a
member of the Hart-Rudman Commission; General (Ret.) Barry R.
McCaffrey, formerly the head of the Office of National Drug
Control Policy; General Charles G. Boyd, Director of the
Washington Office of the Council on Foreign Relations, who was
the Executive Director of the Hart-Rudman Commission; Stephen
E. Flynn, Senior Fellow with the Council on Foreign Relations;
and Thomas H. Stanton of the National Academy of Public
Administration. These witnesses noted some of the shortcomings
in Governor Ridge's appointment as head of the Office of
Homeland Security, and highlighted the country's problems in
managing its borders as an example of the hurdles the country
must overcome to more effectively guard against future attacks.
On April 11, 2002 the Committee held a hearing on draft
legislation to create a National Department of Homeland
Security and a White House Office on Combating Terrorism. The
hearing focused on the need to provide new leadership on a
range of homeland threats, including terrorism, by
consolidating into a single Department the key Federal agencies
and programs responsible for border security, critical
infrastructure protection and emergency response, as well as on
the need for a White House office to play a government-wide
coordinating role on terrorism, focusing in particular on
matters outside the purview of the new Homeland Security
Secretary such as military and intelligence policy. The
legislation, which was later introduced by Chairman Lieberman
with some modifications as S. 2452, also called for a
comprehensive national strategy to combat terrorism, to be
developed collaboratively by the new Secretary of Homeland
Security and the Director of the White House Office for
Combating Terrorism.
At the April 11, 2002, hearing the Committee heard from
Representative Ellen Tauscher (D-CA); Senator Bob Graham (D-
FL); Senator Arlen Specter (R-PA); Senator Judd Gregg (R-NH);
Representative William ``Mac'' Thornberry (R-TX); and
Representative Jane Harman (D-CA). Other witnesses included
former Senator Warren B. Rudman; David M. Walker, the
Comptroller General of the U.S. General Accounting Office;
Mitchell E. Daniels, Jr., the Director of the Office of
Management and Budget; Phil Anderson, Senior Fellow and
Director, Homeland Security Initiative at the Center for
Strategic and International Studies (CSIS); I.M. ``Mac''
Destler, Professor at the School of Public Affairs, University
of Maryland; Stephen M. Gross, Chairman of the Border Trade
Alliance; Elaine Kamarck, Lecturer in Public Policy at
Harvard's Kennedy School of Government; and Paul C. Light, Vice
President and Director of Governmental Studies Program at The
Brookings Institute.
In June 2002, the President dropped his opposition to
creating a new Department and released his own proposal to
create a Department of Homeland Security. On June 20, 2002, the
Committee held a hearing to examine differences between the
President's proposal and S. 2452 as reported out by the
Committee in May, 2002. Witnesses included Tom Ridge, Assistant
to the President for Homeland Security, and former Senators
Gary Hart and Warren B. Rudman. The key issues considered
included: Information sharing and intelligence analysis;
specific agencies included in or left out of the President's
proposal; the impact of a new Department on agency non-homeland
security functions; the impact on employees moved to the new
Department; and the transition and cost of a new Department.
Three subsequent hearings also considered the President's plan,
in the context of specific issues: Two hearings, on June 26 and
27, 2002, examined the impact on the intelligence community,
and a hearing on June 28, 2002 focused on protecting against
weapons of mass destruction.
Hearings on Homeland Security Vulnerabilities
CRITICAL INFRASTRUCTURE
The Committee held three hearings on critical
infrastructure issues. The first, on September 12, 2001, had
been scheduled before the terrorist attacks and focused on
cyber-security. Joel C. Willemssen, Managing Director,
Information Technology Issues, GAO, testified that Federal
computer systems are plagued with weaknesses that continue to
put critical operations and assets at risk. Willemssen
recommended that the Administration take greater steps to
develop the strong analytical and information-sharing
capabilities required by President Clinton's Presidential
Decision Directive (PDD) 63, to protect the Nation's critical
infrastructures. Roberta L. Gross, Inspector General for NASA,
described the collective findings of 21 departmental and agency
Inspectors General, which discovered a number of problems in
agencies' implementation of PDD 63.
On October 4, 2001, the Committee received testimony
regarding the government's implementation of PDD 63, which
established the country's framework for protecting its critical
infrastructure. The hearing, entitled ``Critical
Infrastructure: Who's in Charge?'' examined the various
government offices established to oversee and coordinate
critical infrastructure protection with the private sector, and
the government's efforts to protect its own critical
infrastructure. While initiatives had been underway before
September 11, 2001, to shore up infrastructure protections,
testimony revealed that progress had been limited, partly
because the responsible offices lacked budget authority and had
difficulty assuring accountability.
Witnesses included: Ronald L. Dick, Director of the FBI's
National Infrastructure Protection Center (NIPC); Sallie
McDonald, Director of the Federal Computer Incident Response
Center, General Services Administration; John S. Tritak,
Director of the Critical Infrastructure Assurance Office
(CIAO), Bureau of Export Administration, Department of
Commerce; Frank J. Cilluffo, Deputy Director of the Global
Organized Crime Project, Center for Strategic and International
Studies; Jamie S. Gorelick, Vice Chair, Fannie Mae; Joseph P.
Nacchio, Chairman and CEO, Qwest Communications International,
Inc.; and Kenneth C. Watson, President, Partnership for
Critical Infrastructure Protection Security.
In a May 8, 2002 hearing, entitled ``Securing our
Infrastructure: Private/Public Information Sharing,'' the
Committee returned to the issue of critical infrastructure
protection. An important part of our national strategy to
protect critical infrastructure has been to foster the sharing
of relevant information between the private sector and the
Federal Government and among entities in the private sector.
Yet some in the private sector reported they were reluctant to
share the necessary information because they fear adverse
consequences to themselves, such as the release of sensitive
information under the Freedom of Information Act (FOIA). On the
other hand, representatives of environmental and open-
government groups stressed the importance of maintaining
appropriate public access to information submitted to the
government, arguing that excessive secrecy actually removes
powerful incentives for remedying health, safety, and security
risks. This hearing examined whether information about critical
infrastructure was being effectively shared and used, and
whether a FOIA exemption or other legislation intended to
foster such sharing and use would be necessary, effective and
appropriate. The hearing also examined S. 1456, the Critical
Infrastructure Information Security Act of 2001, which had been
introduced by Senators Bennett and Kyl on September 24, 2001.
The witnesses were: Ronald L. Dick, Director of NIPC; John
G. Malcolm, Deputy Assistant Attorney General, Criminal
Division, U.S. Department of Justice; John S. Tritak, Director
of CIAO; Michehl R. Gent, CEO, North American Electric
Reliability Council; Harris N. Miller, President, Information
Technology Association of America; Alan Paller, Director of
Research, The SANS Institute; Ty R. Sagalow, Board Member,
Financial Services ISAC and Executive Vice President, eBusiness
Risk Solutions, American International Group; David L. Sobel,
General Counsel, Electronic Privacy Information Center; and
Rena I. Steinzor, Academic Fellow, Natural Resources Defense
Council.
AVIATION SECURITY
On September 25, 2001, at a hearing entitled ``Weak Links:
How Should the Federal Government Manage Airline Passenger and
Baggage Screening?'' witnesses testified to the massive
turnover rates and poor performance among airport screeners due
to inadequate training, low wages and lack of benefits. The
hearing revealed significant weaknesses in screening checked
bags for explosives, restricting access to sensitive areas of
the airport, and in screening passengers and their carry-on
items for possible threats. Those testifying included Monte R.
Belger, Acting Deputy Administrator, Federal Aviation
Administration, U.S. Department of Transportation; Dr. Gerald
L. Dillingham, Associate Director for Transportation Issues,
GAO; Kenneth M. Mead, Inspector General, U.S. Department of
Transportation; Robert W. Baker, Vice Chairman, American
Airlines; Rear Admiral Paul E. Busick, USCG Ret., President and
Executive Director, North Carolina Global TransPark Authority;
Leonard L. Griggs, Jr., Airport Director, Lambert-St. Louis
International Airport; Aubrey ``Bill'' Harvey, Jr., Trainer of
Screeners, Chicago O'Hare International Airport; and Michael B.
LaPier, Executive Director, Central Illinois Regional Airport.
The Committee held a second hearing on aviation safety on
November 14, 2001, to determine what, if any, improvements had
been made to make air travel safer after the September 11
terrorist attacks. Although witnesses described some
improvements, they also noted persistent problems. For example,
the Department of Transportation Inspector General testified
that only 10 percent of checked baggage was being scanned for
explosives, and explosives detection machines were being
underutilized. Witnesses at this hearing included Jane F.
Garvey, Administrator, Federal Aviation Administration; Kenneth
M. Mead, Inspector General, Department of Transportation; Bruce
E. Carter, Director of Aviation, Quad City International
Airport; Jacqueline Mathes, Flight Attendant, Association of
Flight Attendants, AFL-CIO; Marianne McInerney, Executive
Director, National Business Travel Association (NBTA); and
Captain Duane E. Woerth, President, Air Line Pilots
Association, International.
BIOTERRORISM
At a hearing on October 17, 2001, the Committee examined
the plans and current capabilities of Federal, State and local
elements of the health system to respond to bioterrorist
attacks and natural disease outbreaks. Held in the midst of the
anthrax attacks on the Senate and elsewhere, the hearing
disclosed that some efforts had been made in recent years to
improve the capabilities of government and health care
providers to respond to these events, such as developing a
national stockpile of pharmaceutical supplies and improving
Federal laboratory capability. However, the hearing also
revealed that far more needed to be done throughout the public
health system, especially to improve State and local public
health laboratory and response capability, health surveillance
programs, and training and preparedness of hospitals and
primary care providers.
Testimony was provided by Tommy G. Thompson, Secretary,
U.S. Department of Health and Human Services; Michael D. Brown,
then Acting Deputy Director, FEMA; Deborah J. Daniels,
Assistant Attorney General, Office of Justice Programs, U.S.
Department of Justice; Henry L. Hinton, Jr., Managing Director,
Defense Capabilities and Management, GAO; Anna Johnson-Winegar,
Deputy Assistant to the Secretary of Defense for Chemical and
Biological Defense, U.S. Department of Defense; Maureen E.
Dempsey, Director, Missouri Department of Health and Senior
Services; Margaret A. Hamburg, Vice President for Biological
Programs, Nuclear Threat Initiative; Gary W. McConnell,
Director, Georgia Emergency Management Agency; and Amy E.
Smithson, Director, Chemical and Biological Weapons Non-
Proliferation Project, The Henry L. Stimson Center.
MAIL SAFETY
Following the anthrax attacks through the mail in October
2001, the Committee held a 2-day hearing on ``Terrorism Through
the Mail: Protecting Postal Workers and the Public.'' The first
day, October 30, 2001, examined the adequacy of the steps the
U.S. Postal Service took to protect the safety of its workers
and the public and its plans to keep its workers and the mail
safe in the future. Based on decades-old studies, public health
professionals did not anticipate that postal employees would be
at risk for inhalation anthrax from sealed envelopes, yet two
postal workers died and others became ill. The witnesses at
this hearing were: John E. Potter, Postmaster General/CEO, U.S.
Postal Service, accompanied by Thomas Day, Vice President of
Engineering, U.S. Postal Service; Patrick Donahoe, Chief
Operating Officer and Executive Vice President, U.S. Postal
Service; and Ken Weaver, Chief Postal Inspector, U.S. Postal
Inspection Service; Gus Baffa, President, National Rural Letter
Carriers Association (NRLCA); William Burrus, President-Elect,
American Postal Workers Union AFL-CIO, accompanied by Denise
Manley, Distribution Clerk, Government Mail Section, Brentwood
Mail Processing Facility; William H. Quinn, National President,
National Postal Mail Handlers Union; Vincent R. Sombrotto,
President, National Association of Letter Carriers (NALC),
accompanied by Tony DiStephano, Jr., President, NALC Branch
380, Trenton, New Jersey.
The next day, October 31, the Committee heard from public
health officials and health experts regarding their
understanding of anthrax and its potential effects, as well as
what could be done better in a future situation. The hearing
explored whether those who had specific information about the
nature of the anthrax sent through the mail accurately
communicated the level of risk presented so that crucial
decisions could be made properly, such as whether to close
postal facilities and how to respond to individuals who might
be infected. Those testifying included Senator Hillary Rodham
Clinton (D-NY); Senator Paul D. Wellstone (D-MN); Mitchell L.
Cohen, Director, Division of Bacterial and Mycotic Diseases,
National Center for Infectious Diseases, Centers for Disease
Control and Prevention (CDC), Department of Health and Human
Services; Raymond J. Decker, Director, Defense Capabilities and
Management Team, U.S. General Accounting Office; Major General
John S. Parker, Commanding General, U.S. Army Medical Research
and Materiel Command and Fort Detrick; Ivan C.A. Walks, Chief
Health Officer of the District of Columbia, and Director,
District of Columbia Department of Health (DOH), accompanied by
Larry Siegel and Ted Gordon, Senior Deputies, District of
Columbia Department of Health (DOH); Dan Hanfling, Chairman,
Disaster Preparedness Committee, Inova Fairfax Hospital; and
Tara O'Toole, Director, Center for Civilian Biodefense Studies,
Johns Hopkins University.
PORT SECURITY
On December 6, 2001, the Committee held a hearing, entitled
``Weak Links: Assessing the Vulnerability of U.S. Ports and
Whether the Government is Adequately Structured to Safeguard
Them.'' The hearing focused on the vulnerabilities at U.S.
ports, which are the country's key transportation link for
global trade; yet, as the testimony revealed, security at these
ports had been sacrificed for efficiency. Several witnesses--
current or former front-line officials with experience in
maintaining port security--proposed solutions to remedy these
vulnerabilities, such as increasing information-sharing among
Federal agencies, as well as among Federal, State and local
agencies and the port operators; ``pushing the borders back''
to inspect goods at points of origin; using technology
effectively to provide in-transit visibility and accountability
for goods; and enlisting private sector cooperation in
heightening security at ports.
The witnesses at the hearing were: Senator Ernest F.
Hollings (D-SC); F. Amanda DeBusk, Miller and Chevalier, former
Assistant Secretary of Commerce and former Commissioner,
Interagency Commission on Crime and Security in U.S. Seaports;
Stephen E. Flynn, Senior Fellow, Council on Foreign Relations
and Commander, U.S. Coast Guard; Rear Admiral Richard M.
Larrabee, Ret., Director, Port Commerce Department, the Port
Authority of New York and New Jersey; Rob Quartel, Chairman and
Chief Executive Officer, FreightDesk Technologies and former
Member, U.S. Federal Maritime Commission; Argent Acosta, Senior
Customs Inspector, Port of New Orleans, and President, National
Treasury Employees Union (NTEU) Chapter 168; Deputy Chief
Charles C. Cook, Memphis Police Department; W. Gordon Fink,
President, Emerging Technology Markets; and Michael D. Laden,
President, Target Customs Brokers, Inc.
ROLE OF STATE AND LOCAL GOVERNMENT IN HOMELAND SECURITY
On December 11, 2001, the Committee held a hearing designed
to review the issues faced by State and local officials, who
are often on the front lines in our Nation's fight against
terrorism. Witnesses stressed that responsibility for homeland
security is shared by the Federal, State, and local
governments. They testified regarding a variety of needs,
including: Increased Federal financial assistance to local
jurisdictions; pre-planning and practice exercises to insure
effective cooperation among first responders; improving
cooperation and communication among governments, and especially
among law enforcement officials; rebuilding of the public
health infrastructure to insure its ability to respond to bio-
terrorism events; and the need for a national strategy for
responding to terrorist attacks.
Witnesses were: New Orleans Mayor Marc H. Morial, Chair of
the National Conference of Mayors; Jay Fisette, Chairman,
Arlington County Board, Virginia; Javier Gonzales, President,
National Association of Counties; Richard J. Sheirer, Director,
Office of Emergency Management, City of New York, New York;
John D. White Jr., Director, Tennessee Emergency Management
Agency; Chief William B. Berger, President, International
Association of Chiefs of Police; Dr. Michael C. Caldwell, on
behalf of the National Association of City and County Health
Officials; Michael J. Crouse, Chief of Staff for the General
President of the International Association of Fire Fighters;
and Major General Joseph E. Tinkham, II, Adjutant General of
Maine and Commissioner, Maine Department of Defense, Veterans
and Emergency Management.
RAIL SAFETY
A December 13, 2001 hearing, entitled ``Riding the Rails:
How Secure is our Passenger and Transit Infrastructure?''
examined the Federal Government's role in helping to protect
the passenger and transit infrastructure. Testimony revealed
that passenger transit systems are difficult to secure and
present attractive targets to terrorists. The fact that the
Nation's public transit systems are diverse and widely
dispersed among communities pose unique security challenges,
which in turn require greater cooperation between Federal,
State and local governments and regional transit authorities.
The Committee heard from Jennifer L. Dorn, Administrator,
Federal Transit Administration, U.S. Department of
Transportation; Dorothy W. Dugger, Deputy General Manager, San
Francisco Bay Area Rapid Transit District (BART); Ernest R.
Frazier, Sr., Chief of Police and Senior Vice President of
System Security and Safety, Amtrak; Trixie Johnson, Research
Director, Mineta Transportation Institute; Jeffrey A. Warsh,
Executive Director, New Jersey Transit Corporation; and Richard
A. White, General Manager, Washington Metropolitan Area Transit
Authority.
PUBLIC HEALTH PREPAREDNESS
On April 18, 2002, the Committee held a hearing on ``The
State of Public Health Preparedness for Terrorism Involving
Weapons of Mass Destruction: A Six-Month Report Card.'' The
hearing was a follow-up to a hearing held by the Committee on
October 17, 2001. That October hearing highlighted a dangerous
lack of preparedness of the Nation to cope with a terrorist
attack utilizing biological, chemical, or radiological agents.
The April 18th hearing focused on: (1) coordination and
communication between public health agencies and law
enforcement in the event of a terrorist attack with public
health implications; (2) the proposed consolidation of public
relations functions within HHS; and (3) budgetary requirements
for HHS to fully implement its counter-terrorism efforts. The
witnesses included HHS Secretary Tommy G. Thompson, who updated
the Committee on the progress the Department had made in terms
of public health preparedness for terrorism involving chemical,
biological, and radiological attacks; Margaret A. Hamburg of
the Nuclear Threat Initiative; Thomas V. Inglesby of the Johns
Hopkins Center for Civilian Biodefense Strategies; and Thomas
L. Milne of the National Association of County and City Health
Officials.
ROLE OF THE INTELLIGENCE COMMUNITY IN HOMELAND SECURITY
On June 26 and 27, 2002, the Committee held hearings that
focused on the relationship between the proposed Department of
Homeland Security and the intelligence community. These
hearings addressed the absence of a single location in the
government where all available intelligence is brought together
to be analyzed. The testimony focused on whether a Department
of Homeland Security requires an all-source intelligence
analysis capability in order to effectively achieve its mission
of preventing, deterring, and protecting against terrorist
attacks; the appropriate role for the Department's intelligence
function when the Nation's intelligence collection priorities
are determined; the extent to which the Department would
already be a significant collector of intelligence-related
information, through agencies such as the Customs Service and
the Coast Guard; and the Department's need for access to
information collected by intelligence, law enforcement, and
other agencies.
Witnesses included Senator Bob Graham (D-FL), and Senator
Richard Shelby (R-AL), the Chairman and Ranking Member of the
Senate Select Committee on Intelligence; CIA Director George J.
Tenet; FBI Director Robert S. Mueller, III; William H. Webster,
former CIA Director; Lt. Gen. Patrick M. Hughes, former
Director of the Defense Intelligence Agency; Jeffrey H. Smith,
former General Counsel of the Central Intelligence Agency; Lt.
Gen. William E. Odom, former Director of the National Security
Agency; Chief William B. Berger, President of the International
Association of Chiefs of Police; and Ashton B. Carter, former
Assistant Secretary of Defense for International Security
Policy.
PROTECTING AGAINST WEAPONS OF MASS DESTRUCTION
On June 28, 2002, the Committee held a hearing, ``Preparing
for Reality: Protecting Against Weapons of Mass Destruction,''
which explored how a Department of Homeland Security should be
organized to counter the threat posed by weapons of mass
destruction, and also addressed relevant science and
technology, research and development, and public health issues.
Witnesses who testified included: Lewis M. Branscomb, Professor
Emeritus, Public Policy and Corporate Management, John F.
Kennedy School of Government, Harvard University; Margaret A.
Hamburg, M.D., Vice President of Biological Programs, Nuclear
Threat Initiative; J. Leighton Reed, M.D., General Partner,
Alloy Ventures; Janet Heinrich, Director, Health Care--Public
Health Issues, GAO; and William J. Madia, Director, Oak Ridge
National Laboratory, Executive Vice President, Battelle
Memorial Institute.
ENRON
As part of its investigation into the demise of Enron, the
full Committee held a series of five hearings looking into
various aspects of the company's collapse. These hearings took
place on January 24, 2002, February 5, 2002, February 27, 2002,
March 20, 2002 and November 12, 2002.
The first of the Committee's hearings on Enron, ``The Fall
of Enron: How Could It Have Happened?'' was held on January 24,
2002. The hearing sought to gain an overview of some of the
most prominent issues arising out of Enron's collapse,
including problems in oversight of the securities markets,
derivatives markets, employee retirement plans, and the energy
markets. Former Securities and Exchange Commission Chairman
Arthur Levitt, Jr., testified about the ``culture of
gamesmanship'' on Wall Street--among the corporate executives,
boards of directors, public accountants, and stock analysts--
that created an atmosphere in which large-scale financial
deception was possible. Former SEC Chief Accountant Lynn E.
Turner testified about flawed and ambiguous financial reporting
rules that Enron used in order to cover its fraud. University
of San Diego Law Professor Frank Partnoy talked about the
unregulated $100 trillion derivatives market, and how Enron
could have taken advantage of this lack of oversight to engage
in false profit-making transactions. Yale Law School Professor
John H. Langbein, addressing the considerable losses suffered
by Enron employees in their retirement accounts, testified that
many 401(k) plans are underdiversified, leaving many employees
of other corporations exposed to the same fate as the Enron
workers. Bruce B. Henning, Director of Regulatory and Market
Analysis at Energy and Environmental Analysis, Inc., testified
about the impact of Enron's collapse on the energy markets.
On February 5, 2002, the Committee held a hearing,
``Retirement Insecurity: 401(k) Crisis at Enron,'' that
examined the enormous losses suffered by the Enron employees in
their 401(k) accounts, which contained high concentrations of
Enron stock (as of December 31, 2000, when Enron stock was at a
high, roughly two-thirds of the $2.1 billion in assets held by
the 401(k) plan was in company stock). The Committee also
examined the circumstances surrounding Enron's ``lock-down'' of
the plan during a time when the company stock price was
dropping, preventing employees from selling the stock and
avoiding some of the losses they experienced.
There were three panels of witnesses. The first panel
included Deborah G. Perrotta, an Enron employee who had lost
her job and most of the value in her 401(k), and William D.
Miller, Jr., Business Manager and Financial Secretary, of the
International Brotherhood of Electrical Workers, Local 125, at
Portland General Electric, an Enron subsidiary. The second
panel included Executive Vice President for Human Resources
Cindy Olson, who had overseen the lock-out and was a member of
the committee overseeing the 401(k) plan; Mikie Rath, Benefits
Manager at Enron; Joseph P. Szathmary of Northern Trust
Retirement Consulting, the company that had been the
recordkeeper for Enron's 401(k) plan; and Catheryn Graham of
Hewitt Associates, the company to which the recordkeeping
responsibilities had been transferred, a transfer that resulted
in the temporary ``lock-down'' of the plan. Finally, the
Committee heard testimony from a third panel about the problems
associated with the way 401(k) plans are overseen and managed
and about related policy issues and recommendation; the third
panel consisted of Karen W. Ferguson, Director of the Pension
Rights Center; James A. Klein, President of the American
Benefits Council; Erik D. Olsen, a member of the Board of
Directors of AARP; Stephen M. Saxon of the Society of
Professional Administrators and Recordkeepers; and Susan J.
Stabile, Professor at St. John's University School of Law.
On February 27, 2002, the Committee held a hearing, ``The
Watchdogs Didn't Bark: Enron and the Wall Street Analysts,'' to
examine why 11 of 16 stock analysts from major firms covering
Enron failed to detect the problems at Enron and continued to
recommend that investors buy the stock until just before the
company declared bankruptcy. The Committee heard from four
analysts from major Wall Street firms--Raymond C. Niles of
Citigroup Salomon Smith Barney, Anatol Feygin of J.P. Morgan
Securities, Inc., Curt N. Launer of Credit Suisse First Boston,
and Richard Gross of Lehman Brothers, Inc.--who defended their
assessments of Enron, as well as from independent analyst
Howard M. Schilit, who testified that there were numerous red
flags in Enron's public filings that should have led the Wall
Street analysts to question their conclusions. In addition,
Robert R. Glauber, Chairman and CEO of National Association of
Securities Dealers, Thomas A. Bowman, President and CEO of
Association for Investment Management and Research, Charles L.
Hill, Thomson Financial/First Call Director of Research, and
Frank Torres, Legislative Counsel of Consumers Union, testified
about the conflicts of interest that can put pressure on
analysts working for Wall Street firms to offer overly positive
stock recommendations in order to establish or maintain
lucrative investment banking client relationships, and about
policy proposals to address these conflicts. Information and
recommendations coming out of this hearing were incorporated
into the Committee staff report on Financial Oversight of
Enron: The SEC and Private Sector Watchdogs (S. Prt. 107-75,
Oct. 7, 2002).
On March 20, 2002, the Committee held a hearing, ``Rating
the Raters: Enron and the Credit Rating Agencies,'' about the
role of the credit rating agencies in Enron's collapse. The
three major credit rating agencies enjoy a special status
because of their greater access to corporate information than
most other market participants, the considerable value placed
on an investment grade rating, and a special SEC designation.
Each of the agencies, however, maintained an investment grade
credit rating on Enron until just 4 days before the company's
bankruptcy. At the hearing, analysts responsible for evaluating
Enron at each of the three major credit rating agencies--Ronald
M. Barone, Managing Director at Standard & Poor's, John C.
Diaz, Managing Director of Moody's Investors Service, Ralph G.
Pellecchia, Senior Director of the Global Power Group at Fitch
Ratings--testified about why they had failed to find or take
into account problems at Enron in their assessments until very
late. The Committee also heard from a panel that addressed
whether additional oversight and/or regulation of ratings
agencies would be desirable. This panel included SEC
Commissioner Isaac C. Hunt, Jr.; Glenn L. Reynolds, CEO of
CreditSights, Inc., an independent credit analysis firm;
Cornell Law School Professor Jonathan R. Macey; and Steven L.
Schwarcz, Professor of Law at Duke University School of Law. As
with the hearing on the Wall Street analysts, information and
recommendations coming out of the credit raters' hearing were
incorporated into the Committee staff report on Financial
Oversight of Enron: The SEC and Private Sector Watchdogs (S.
Prt. 107-75, Oct. 7, 2002).
On November 12, 2002, the Committee held a hearing,
``Asleep at the Switch: FERC's Oversight of Enron
Corporation,'' on the role of FERC in overseeing Enron. David
M. Berick, professional staff member for the Committee,
testified about the findings arising from the Majority
Committee staff's investigation. In particular, Mr. Berick
testified that there were four areas where FERC utterly failed
to conduct effective oversight of Enron: Its inaction in the
face of Enron's use of apparently sham sales to maintain
favorable regulatory status for some of the company's wind
farms; its inquiry into Enron's electronic trading system,
Enron Online; its lack of oversight into questionable
transactions between Enron and its regulated affiliates; and
its slow response to abusive trading practices allegedly
engaged in by Enron traders during the power crisis in the
California and Western energy markets in 2000-2001. The
Committee then heard from each of the four individuals who were
FERC commissioners at the time: Patrick H. Wood, III
(Chairman), Linda K. Breathitt, Nora M. Brownell, and William
L. Massey. Among other things, Chairman Wood discussed new
measures undertaken by FERC that he believed would address the
issues raised by the Committee's investigation, including the
establishment of a new Office of Market Monitoring and
Investigations. The hearing's final panel, comprised of Paul L.
Joskow, Director of the Center for Energy and Environmental
Policy Research at the Massachusetts Institute of Technology,
and Frank A. Wolak, Professor of Economics at Stanford
University, provided their perspective on FERC's performance
and the outlook for FERC going forward.
In connection with this hearing, Chairman Lieberman
released a staff memorandum setting out Majority staff's
findings in more detail, and Ranking Minority Member Thompson
released a staff memorandum setting forth Minority views on
these matters. These memoranda were included in the appendix to
the printed hearing record (S. Hrg. 107-854).
OVERSIGHT OF ENERGY DEREGULATION
The Committee held a series of three hearings to examine
the impacts of deregulation of U.S. electricity and natural gas
markets, in general, and the markets in California and the
West, in particular. These hearings were held on June 13, 2001,
June 20, 2001, and June 28, 2001.
The first hearing, on June 13, 2001, focused primarily on
the impacts of California's failed transition to a market-based
utility system and highlighted both the economic costs and the
need for aggressive regulatory oversight and intervention by
Federal energy regulators when these ``open'' markets are being
developed, fail, or are being abused. The Committee heard
testimony from a panel of experts in the economics of the
deregulation of markets concerning whether additional
intervention in the California market was necessary or
appropriate.
Following testimony by Senator Dianne Feinstein (D-CA),
Senator Barbara Boxer (D-CA), and Senator Larry E. Craig (R-
ID), the Committee heard testimony from the following
witnesses: Paul L. Joskow, a professor and researcher at the
Massachusetts Institute of Technology in the areas of
industrial organization, energy and environmental economics,
and government regulation of industry; Alfred E. Kahn,
professor emeritus of Political Economy at Cornell University,
and former Chairman of the Civil Aeronautics Board under
President Carter where he led the Nation's drive to deregulate
the airline industry; Severin Borenstein, professor in Public
Policy and Business Administration at the University of
California's Haas School of Business, Director of the
University of California Energy Institute, and former member of
the Governing Board of the California Power Exchange
Corporation; Frank A. Wolak, specialist in Industrial
Organization and Econometric Theory at Stanford University,
where he is a Professor in the Economics Department and is also
the Chairman of the Market Surveillance Committee of the
California Independent System Operator; Lawrence J. Makovich
who is a Senior Director of Cambridge Energy Research
Associates; and William W. Hogan of the John F. Kennedy School
of Government at Harvard University.
The second hearing was held on June 20, 2001 on the role of
FERC in the California energy crisis and the implications of
the crisis for deregulation of energy markets nationwide. The
hearing focused primarily on FERC's actions, and inactions, in
responding to power outages and massive price increases
experienced in California and in adjacent States. Whereas the
hearing on June 13 addressed the economic impacts of
deregulation and economic justification for rate relief for
California and the West, the hearing on June 20 examined the
legal and regulatory underpinnings for the failure of the
California and Western markets and possible solutions.
Following testimony by several members of the Senate--Senator
Maria Cantwell (D-WA), Senator Frank H. Murkowski (R-AK), and
Senator Patty Murray (D-WA)--the Committee took testimony from
four panels composed of the following witnesses: Governor Gray
Davis, State of California; Governor John Hoeven, State of
North Dakota; Governor Judy Martz, State of Montana; Christine
O. Gregoire, Attorney General for the State of Washington; Roy
Hemmingway, Chairman of the Oregon Public Utilities Commission;
Curt L. Hebert, Jr., Chairman, FERC; Linda K. Breathitt,
Commissioner, FERC, Nora M. Brownell, Commissioner, FERC,
William L. Massey, Commissioner, FERC, and Patrick H. Wood,
III, Commissioner, FERC.
The final hearing took place on June 28, 2001 and examined
the impact of deregulation of the electricity industry on
system reliability of the electric grid. The Committee heard
from a panel of expert witnesses comprised of the following:
David N. Cook, General Counsel, North American Electric
Reliability Council; Phillip G. Harris, President and CEO, PJM
Interconnection, LLC; Kevin A. Kelly, Director, Division of
Policy Innovation and Communication, FERC; and Irvin A.
``Sonny'' Popowsky, the Pennsylvania Consumer Advocate on
behalf of the National Association of State Utility Consumer
Advocates (NASUCA).
GOVERNMENT REORGANIZATION
Climate Change Legislation: On July 18, 2001, the Committee
held a hearing entitled ``S. 1008--The Climate Change Strategy
and Technology Innovation Act of 2001.'' S. 1008 sought to
create an Office on Climate Change within the White House, and
require the office to prepare a detailed strategy to stabilize
the concentration of greenhouse gasses in the atmosphere. The
legislation also sought to create a new office within the
Department of Energy, with new funding, to research and develop
technologies to combat climate change. Eight witnesses
appeared: The bill's chief sponsor, Senator Robert C. Byrd (D-
WV); two climate scientists, Thomas R. Karl, Director, National
Climatic Data Center, NOAA, and James E. Hansen, head of NASA's
Goddard Institute for Space Studies; Eileen Claussen, President
of the Pew Center on Global Climate Change; James A. Edmonds,
Senior Staff Scientist, Pacific Northwest National Laboratory,
Battelle Memorial Institute; Dale E. Heydlauff, Senior Vice
President-Environmental Affairs, American Electric Power
Company; Jonathan Lash, President, World Resources Institute;
and Margo Thorning, Senior Vice President and Chief Economist
for the American Council for Capital Formation. In addition,
the Committee received written testimony from Prof. John P.
Holdren, Director of a program on Science, Technology and
Public Policy at Harvard University's Kennedy School of
Government, and David G. Hawkins, Director, NRDC Climate
Center, Natural Resources Defense Counsel.
EPA Cabinet Bill: On July 24, 2001, the Committee held a
hearing on S. 159, a bill to elevate the Environmental
Protection Agency to a Cabinet-level Department. The testimony
at the hearing favored elevating EPA. Witnesses at the hearing
were: Senator Barbara Boxer (D-CA), the bill's sponsor;
Representative Sherwood L. Boehlert (R-NY); EPA Administrator
Christine Todd Whitman; former EPA Administrators Carol M.
Browner and William K. Reilly; and former EPA General Counsel
E. Donald Elliott.
REGULATORY OVERSIGHT
The Committee held 2 days of hearings regarding the Bush
Administration's implementation of environmental laws.
Witnesses testifying on March 7, 2002, provided an overview of
actions taken during the first year of the Bush administration.
Senator Larry E. Craig (R-ID) and Senator James M. Jeffords (I-
VT) testified on the first panel. The Administrator of the
Environmental Protection Agency, Christine Todd Whitman,
testified on behalf of the Administration and focused on
President Bush's ``Clear Skies'' proposal, an idea for a
legislative initiative to change the Clean Air Act. She also
responded to Committee members' concerns regarding expected
changes in the New Source Review (NSR) program, promising the
Administration would not undermine the Clean Air Act.
Eric V. Schaeffer, former Director of the Office of
Regulatory Enforcement of EPA, testified regarding the adverse
impact on EPA's enforcement program of personnel reductions; he
also described the EPA's difficulty obtaining settlement
agreements in actions against industry to enforce emissions
requirements as a result of the Administration's discussion of
its plans to revise regulations for NSR. E. Donald Elliott, a
Yale and Georgetown Law Schools Professor and former EPA
General Counsel, testified that he believed the NSR program was
a failure.
Two witnesses described a range of Administration
activities they believed undermined implementation of
environmental laws, including changes in regulations, agency
policies and practices and the settlement of lawsuits
challenging environmental regulations. Thomas O. McGarity, a
law professor from the University of Texas, testified that the
Administration had taken steps to reverse or modify existing
protective programs, and was re-establishing a more aggressive
role for the Office of Information and Regulatory Affairs,
Office of Management and Budget, in reviewing regulations.
Gregory S. Wetstone, representing the Natural Resources Defense
Council, submitted a report analyzing actions throughout the
government and identifying ``more than 60 environmental
retreats on issues ranging from clean air, to clean water, to
protection of National Parks, wildlife, wetlands and forests.''
On March 13, 2002, citizens who had experienced first hand
the impact of the change in environmental policies testified
about their concerns: The impact of changes in diesel emission
regulations, efficiency standards for air conditioners, and
requirements to upgrade controls on power plants on air
pollution; the effect of snowmobiles in Yellowstone National
Park on the air quality and enjoyment of the park; the adverse
impact of combined animal feeding operations on water quality
and the critical need to improve the regulations; the inability
of citizens to successfully oppose mining operations in areas
posing risks to safety and the environment; and the impact of
accelerated energy development (occurring without appropriate
environmental analysis) on the land, wildlife habitat, and
water quality in the West. A representative of the Reason
Public Policy Institute described voluntary, cooperative, and
locally-derived environmental policy approaches which he
testified have accomplished results without the negative
effects of regulatory requirements.
The witnesses appearing on March 13 were: Richard
Blumenthal, Attorney General, State of Connecticut; Richard J.
Dove, Southeastern Representative, Waterkeeper Alliance;
Kenneth Green, Chief Environmental Scientist, Reason Public
Policy Institute; Donald Newhouse, Guardians of the Rural
Environment; Hope Sieck, Associate Program Director, Greater
Yellowstone Coalition; Stephen C. Torbit, Senior Scientist,
Rocky Mountain Natural Resource Center, on behalf of the
National Wildlife Federation.
COMMISSION ON THE TERRORIST ATTACKS OF SEPTEMBER 11
On February 7, 2002, the Committee held a hearing to
consider S. 1867, legislation introduced by Chairman Lieberman
to create an independent commission to investigate the
terrorist attacks of September 11, 2001. Four witnesses
discussed how an independent commission could help the Nation
address unanswered questions and contribute to the war on
terrorism. All of the witnesses had served on independent
commissions addressing important national security issues.
Witnesses included Norman R. Augustine, Chairman of the
Executive Committee, Lockheed Martin Corporation, former
Commissioner, U.S. Commission on National Security; Professor
Richard K. Betts, Director, Institute of War and Peace Studies,
Columbia University, former Commissioner, National Commission
on Terrorism; Dave McCurdy, President, Electronic Industries
Alliance, former Commissioner, Commission to Assess the
Organization of the Federal Government to Combat the
Proliferation of Weapons of Mass Destruction; and Maurice
Sonnenberg, Senior International Advisor, Bear, Stearns and
Company, Inc., and former Vice Chair, National Commission on
Terrorism.
ELECTRONIC GOVERNMENT
On July 11, 2001, the Committee held a hearing to consider
S. 803, the E-Government Act, a bill introduced by Chairman
Lieberman. The witnesses at the hearing testified to the
potential of the Internet and other information technologies to
provide information and services, organized to citizens' needs,
and to transform the way government operates. The E-Government
Act was ultimately enacted as H.R. 2458. Witnesses at the
hearing included Senator Conrad Burns (R-MT), chief co-sponsor
of S. 803; Sean O'Keefe, Deputy Director, Office of Management
and Budget; Anne K. Altman, Managing Director, U.S. Federal-IBM
Corporation; Dr. Costis Toregas, President, Public Technology,
Inc.; Aldona Valicenti, President, National Association of
State Chief Information Officers; Greg Woods, Chief Operating
Officer, Student Financial Assistance, U.S. Department of
Education; Sharon A. Hogan, University Librarian, University of
Illinois at Chicago, on behalf of the American Library
Association, the American Association of Research Libraries and
the American Association of Law Libraries; Barry Ingram, Vice
President and Chief Technology Officer, EDS Global Government
Industry Group, on behalf of the Information Technology
Association of America (ITAA); Patricia McGinnis, President and
Chief Executive Officer, Council for Excellence in Government;
and Joseph R. Wright, former Director and Deputy Director,
Office of Management and Budget, and Vice Chairman, Terremark
Worldwide, Inc.
ELECTION REFORM
On May 3 and May 9, 2001, the Governmental Affairs
Committee held 2 days of hearings, entitled ``Federal Election
Practices and Procedures,'' which explored the flaws in the
voting system in the United States and discussed possible
solutions.
The hearings were divided according to the two major
hurdles citizens face with respect to participating in any
election: (1) getting to the polls, including registering to
vote, and (2) voting at the polls, including getting ballots
cast and counted. Voters were disenfranchised in the November
2000 election in two ways: Some never made it past the front
desk of the polling place, because they were told that they
were not registered to vote. Others were able to vote, but did
not succeed in casting the ballots they intended, often because
they were foiled by faulty voting equipment, poor ballot
design, unclear voting instructions, long lines, ballots not
translated into their language, polling places that were moved
without notice, and poorly trained poll workers, who
misinformed, rushed, harassed or refused to assist voters.
Witnesses, including Senator Christopher S. ``Kit'' Bond (R-
MO), also expressed concern about fraud at the polls, and the
need for better verification of those qualified to vote through
a more effective registration process.
At the hearing on May 3, 2001, the Committee heard from
four panels of witnesses, including Senator Bond and
Representative William Lacy Clay (D-MO); Carolyn Jefferson-
Jenkins, President of the League of Women Voters; Ralph G.
Neas, President of People for the American Way; Deborah M.
Phillips, Chairman of The Voting Integrity Project; Professor
Larry J. Sabato of the University of Virginia; Professor R.
Michael Alvarez of the California Institute of Technology; John
T. Willis, Maryland Secretary of State; Gary McIntosh, State
Elections Director for Washington State; and Daniel B. Perrin
of the Committee for Honest Politics.
At the May 9 hearing, the Committee heard from Hilary O.
Shelton, Washington Bureau Director of the NAACP; Arturo
Vargas, Executive Director of the National Association of
Latino Elected and Appointed Officials; Stephen Knack, Senior
Research Economist at The World Bank; Hans A. von Spakovsky of
the Fulton County, Georgia Board of Registration and Elections;
Conny B. McCormack, Registrar-Recorder/County Clerk of Los
Angeles County, California; Sharon Priest, Arkansas Secretary
of State; R. Doug Lewis, Executive Director of The Election
Center; and Samuel F. Wright, Co-Chair of the Uniformed
Services Voting Rights Committee of the Reserve Officers
Association.
The hearings yielded a number of possible solutions to
protect voters from facing the same hurdles they encountered in
the 2000 elections. To address difficulties voters had found
because of faulty registration lists, witnesses emphasized the
critical importance of having a centralized database of
registered voters--ideally, one that is tied with other
databases such as the Department of Motor Vehicles, so that the
list of registered voters would be accurate and up-to-date. A
number of witnesses also encouraged States to permit voters to
cast provisional ballots, so the voters' qualifications could
be checked by the registrar after Election Day but before the
results are certified, and the votes counted if appropriate. To
address problems at the polls, witnesses stressed that voting
machines were one part of the problem; though in many instances
the technology posed unnecessary challenges to voters--
particularly where punch card machines were in use--all agreed
that better voter education and better poll worker retention
and training would also make an importance difference in
ensuring that all votes cast would be counted. However, several
witnesses warned that efforts to increase access to the polls
for legitimate voters could lead to actual and potential fraud.
They suggested combating fraud by making registration and
voting more restrictive in certain ways, such as a requirement
that voters show picture identification at the polls.
STREAMLINING FINANCIAL DISCLOSURE FOR EXECUTIVE BRANCH NOMINEES
On April 4 and 5, 2001, the Committee held 2 days of
hearings, entitled ``The State of the Presidential Appointment
Process,'' on ways to streamline the financial disclosure
process for Executive Branch nominees, while also strengthening
disclosure of actions those nominees take once in office
regarding potential conflicts of interest. Witnesses testified
about the barriers to finding and confirming qualified and
talented individuals. A recurring complaint has been the
burdensome nature of the financial disclosure nominees must
make. In addition, the Office of Government Ethics (OGE)
presented a report it was directed to prepare pursuant to the
Presidential Transition Act of 2000 regarding financial
disclosure requirements for Executive Branch nominees and
appointees. The testimony recommended steps Congress could take
to improve the nomination process for high level Executive
Branch positions, including avoiding duplication and overlap
between various financial disclosure forms and focusing the
information sought on the areas required for conflict of
interest determinations. Scott Harshbarger, testifying on
behalf of Common Cause, expressed the view that while some
changes were warranted, OGE's proposal was too drastic in
scope.
Witnesses at the hearings included OGE Executive Director
Amy L. Comstock; Paul C. Light, Vice President and Director of
Governmental Studies at The Brookings Institute. Franklin D.
Raines, former Director, Office of Management and Budget, and
former Senator Nancy Kassebaum Baker, who appeared on behalf of
the Presidential Appointee Initiative; Common Cause President
Scott Harshbarger; Norman J. Ornstein, Resident Scholar,
American Enterprise Institute, on behalf of the Transition to
Governing Project; OMB Deputy Director Sean O'Keefe; former
Director of White House Office of Presidential Personnel Robert
J. Nash; Colby College Professor G. Calvin Mackenzie; and
Patricia McGinnis, President and CEO of the Council for
Excellence in Government.
Following these hearings, through the efforts of Chairman
Lieberman and Ranking Minority Member Thompson, the Committee
revised its own financial disclosure forms for nominees
considered by the Committee. The Committee also produced a
multi-volume compilation of past commission reports on the
financial disclosure process.
D.C. VOTING RIGHTS
On May 23, 2002, the Committee held a hearing entitled
``Voting Representation in Congress for Citizens of the
District of Columbia,'' marking the first time since 1994 that
Congress has held a hearing on the question of whether citizens
of our Nation's capital should be granted full voting
representation in Congress. Proponents of voting representation
for District residents contended that D.C. residents should
have the same rights to participate in democracy as citizens of
the 50 States. They told the Committee that depriving District
residents of full representation in the Congress is
inconsistent with the representative democracy that was
envisioned by the framers, which fundamentally derives its
authority from the consent of the governed. The witnesses
testified that District residents share the same burden of
citizenship as other Americans, including paying their share of
Federal income taxes and fighting in foreign wars; therefore,
the legislators making decisions about these and other
matters--particularly those directly related to the District--
should be accountable to its residents.
Expert witnesses discussed the most effective methods to
achieve full Congressional representation for the District.
Washington College of Law Professor Jamin B. Raskin, American
University, testified that Congress could effect this goal
through legislation, while Professor Adam H. Kurland of Howard
University Law School testified that a constitutional amendment
would be necessary. Other witnesses included Senator Russell D.
Feingold (D-WI); Delegate Eleanor Holmes Norton (D-DC);
Representative Eddie Bernice Johnson (D-TX), Chair of the
Congressional Black Caucus; D.C. Mayor Anthony A. Williams;
D.C. Council Chairman Linda W. Cropp; D.C. Statehood Senator
Florence H. Pendleton; and Wade Henderson, Executive Director
of the Leadership Conference for Civil Rights. Representative
Ralph Regula (D-OH) submitted a prepared statement.
PROTECTING PUBLIC HEALTH AND SAFETY
The Committee held three hearings relating to public health
and safety issues:
The first hearing on drug and alcohol abuse, entitled
``Ecstasy Use Rises: What More Needs to be Done by the
Government to Combat the Problem?'' was held on July 30, 2001.
It sought to bring attention to the harm that ecstasy poses to
America's communities. Representatives from the Drug
Enforcement Administration, Customs Service, Office of National
Drug Control Policy, and the Miami-Dade Police Department
provided the Committee with graphic evidence of the growing
scope of ecstasy trafficking. They noted that the trade is no
longer just confined to Western Europe, where the drug is
largely manufactured, but is now a worldwide phenomenon. The
agencies acknowledged the need for closer coordination and
cited examples of interagency cooperation. Appearing before the
Committee were two recovering teenage addicts from the Phoenix
House Drug Rehabilitation Center in Long Island, New York, who
testified about the drug's impact on their lives. Other
witnesses included John M. Bailey, Connecticut Chief State's
Attorney; Joseph D. Keefe, Chief of Operations, Drug
Enforcement Administration, U.S. Department of Justice; Alan I.
Leshner, Director of the National Institute on Drug Abuse,
National Institute of Health; Roy Rutland, with the Miami-Dade
Police Department; John C. Varrone, Assistant Commissioner of
Customs at the United States Customs Service; Donald R. Vereen,
Jr., Deputy Director, Office of National Drug Control Policy,
Executive Office of the President.
On May 15, 2002, in response to six deaths of Connecticut
college students in 1 year due to excessive drinking, Senator
Lieberman held a hearing, entitled ``Under the Influence: The
Binge Drinking Epidemic on College Campuses.'' The hearing
examined the high numbers of alcohol-related student deaths and
accidents on college campuses across the country and
recommended strategies to address it.
Among the witnesses was Mark S. Goldman, Director of the
Alcohol and Substance Abuse Research Institute, University of
Florida. He presented a recently published study illustrating
the seriousness of heavy, episodic drinking on college
campuses. The study found that each year, college drinking
contributes to 1,400 deaths, 70,000 sexual assaults or rapes,
and 500,000 injuries. Other witnesses at the hearing were Ralph
H. Hingson, Professor and Associate Dean for Research at the
School of Public Health, Boston University; Raynard S. Kington,
Acting Director of National Institute on Alcohol Abuse and
Alcoholism at the National Institute on Health; Drew Hunter,
Executive Director of The BACCHUS and GAMMA Peer Education
Network; Robert F. Nolan, Chief of Police at the Hamden,
Connecticut, Police Department; Daniel P. Reardon, parent; and
John D. Welty, President of California State University in
Fresno.
On June 12, 2002 the Committee held a hearing, entitled
``Protecting Our Kids: What Is Causing the Current Shortage in
Childhood Vaccines?'' on the shortages of childhood vaccines
for significant diseases. The hearing focused on the degree of
the problem, as well as potential solutions and long-term
consequences if not addressed. Witnesses included Timothy F.
Doran, Chairman, Department of Pediatrics, Greater Baltimore
Medical Center on behalf of the American Academy of Pediatrics;
Mary Anne Jackson, Chief, Pediatric Infectious Diseases
Section, Children's Mercy Hospitals and Clinics, Kansas City,
Missouri; Wayne F. Pisano, Executive Vice President, Aventis
Pasteur North America, on behalf of Pharmaceutical Research and
Manufacturers of America; Lester M. Crawford, Deputy
Commissioner, Food and Drug Administration, U.S. Department of
Health and Human Services; and Walter A. Orenstein, Director,
National Immunization Program, Centers for Disease Control and
Prevention, U.S. Department of Health and Human Services
MEDICARE PAYMENT POLICIES FOR AMBULANCE SERVICES
The Committee held an oversight hearing on November 15,
2001, entitled ``Oversight of the Centers for Medicare and
Medicaid Services: Medicare Payment Policies for Ambulance
Services''; the hearing examined the proposed changes in
Medicare reimbursement of ambulance services and the impact
those changes would have on the beneficiaries who rely on them.
Witnesses included Thomas A. Scully, Administrator, Centers for
Medicare and Medicaid Services, U.S. Department of Health and
Human Services; Mark D. Lindquist, Medical Director, Emergency
Department, St. Mary's Regional Health Center; Gary L.
Wingrove, Paramedic and Manager, Gold Cross Ambulance Service,
on behalf of the Minnesota Ambulance Association; Mark D.
Meijer, Owner and CEO, Life EMS Ambulance Service, on behalf of
the American Ambulance Association; James N. Pruden, Chairman,
New Jersey EMS Coalition; Laura A. Dummit, Director, Health
Care--Medicare Payment Issues, U.S. General Accounting Office;
Lori Moore, Assistant to the General President for EMS
Services, International Association of Firefighters; Deputy
Chief John Sinclair, Secretary, Emergency Medical Services
Section of the International Association of Fire Chiefs.
ENTERTAINMENT RATINGS
On July 25, 2001, the Committee held a hearing called
``Rating Entertainment Ratings: How Well Are They Working For
Parents and What Can Be Done To Improve Them?'' The hearing
focused on a letter sent to policymakers in June 2001 by a
coalition of researchers, medical groups, and child development
experts. The letter, initiated by the National Institute on
Media and the Family, argued that the different ratings are
often applied inconsistently, that many parents find the
multiplicity of rating icons confusing, and called for
replacing the existing formats with a new uniform rating
system, monitored by an independent oversight committee and
grounded in sound research. The witnesses at the hearing
discussed the concerns raised in the letter and explored the
merits of their recommendations, presented the response of
industry keepers of these rating systems, and discussed
possible ways to improve the ratings to better inform parents
and better protect children.
Witnesses included Senator Sam Brownback (R-KS); Dale
Kunkel, Professor of Communication, University of California,
Santa Barbara; Roger Pilon, Vice President for Legal Affairs,
CATO Institute; Dr. Michael Rich, Assistant Professor of
Pediatrics, Harvard Medical School; Laura Smit, mother; William
Baldwin, President, The Creative Coalition; Douglas Lowenstein,
President, Interactive Digital Software Association; Doug
McMillon, Senior Vice President and General Merchandise
Manager, Wal-Mart Stores, Inc.; Hillary Rosen, President and
CEO, Recording Industry Association of America; Jack Valenti,
President and CEO of The Motion Picture Association of America;
and Russell Simmons, Chairman, Phat Farm.
HIGH PERFORMANCE COMPUTER EXPORT CONTROLS
On March 15, 2001, the Committee held a hearing to discuss
a GAO report on the changes in export control policy regarding
high performance computers. The hearing focused on these
computers as ``dual use'' commodities--their use and potential
use for military purposes in countries known to be
proliferating weapons of mass destruction.
Witnesses included Susan S. Westin, Managing Director,
accompanied by Stephen M. Lord, Assistant Director, and Jeffrey
D. Phillips, International Security Analyst, International
Affairs and Trade Division, U.S. General Accounting Office.
FEDERAL AND SERVICE CONTRACT WORKFORCE
On March 6, 2002, the Committee held a hearing to review
the Administration's initiatives to increase the outsourcing of
Federal services to the private sector, and how these
initiatives affect the quality and cost of work performed for
and by the Federal Government. The hearing focused on the
Administration's numerical goals to increase competitions and
conversions of Federal jobs; many have criticized the numerical
quotas as being arbitrary and unrealistic. The hearing also
addressed proposed legislation to allow Federal workers to
compete more frequently for jobs being outsourced, and, in some
cases, for new work.
Witnesses included Angela B. Styles, Administrator, Office
of Federal Procurement Policy, Office of Management and Budget;
Barry W. Holman, Director, Defense Capabilities and Management,
U.S. General Accounting Office; Dan Guttman, Fellow, Washington
Center for the Study of American Government, Johns Hopkins
University; Bobby L. Harnage, Sr., National President, American
Federation of Government Employees, AFL-CIO; Colleen M. Kelley,
National President, National Treasury Employees Union (NTEU);
Mary Lou Patel, Chief Financial Officer, Advanced System
Development, Inc.; Stan Z. Soloway, President, Professional
Services Council.
V. Reports, Prints, Studies, and GAO Reports
During the 107th Congress, the Committee prepared and
issued 31 reports, prints, and studies on these topics:
(1) Activities of the Committee on Governmental Affairs
(For the 105th Congress) (S. Rept. 107-1);
(2) Activities of the Committee on Governmental Affairs
(For the 106th Congress) (S. Rept. 107-20);
(3) Office of Government Ethics Authorization Act of
2001 (S. Rept. 107-88);
(4) To Prevent the Elimination of Certain Reports (S.
Rept. 107-90);
(5) Climate Change Strategy and Technology Innovation
Act of 2001 (S. Rept. 107-99);
(6) District of Columbia College Access Improvement Act
of 2001 (S. Rept. 107-101);
(7) Amending the charter of Southeastern University of
the District of Columbia (S. Rept. 107-102);
(8) District of Columbia Police Coordination Amendment
Act of 2001 (S. Rept. 107-103);
(9) District of Columbia Family Court Act of 2001 (S.
Rept. 107-107);
(10) District of Columbia Family Court Act of 2001 (S.
Rept. 107-108);
(11) Making Permanent the Authority to Redact Financial
Disclosure Statements of Judicial Employees and Judicial
Officers (S. Rept. 107-111);
(12) Amending chapter 90 of title 5, United States Code,
relating to Federal long-term care insurance (S. Rept. 107-
128);
(13) Phony Identification And Credentials Via The
Internet (S. Rept. 107-133);
(14) To require that Federal agencies be accountable for
violations of antidiscrimination and whistleblower protection
laws; to require that each Federal agency post quarterly on its
public Web site, certain statistical data relating to Federal
sector equal employment opportunity complaints filed with each
agency; and for other purposes (S. Rept. 107-143);
(15) To authorize certain Federal officials with
responsibility for the administration of the criminal justice
system of the District of Columbia to serve on and participate
in the activities of the District of Columbia Criminal Justice
Coordinating Council, and for other purposes (S. Rept. 107-
145);
(16) To establish the National Commission on Terrorist
Attacks Upon the United States, and for other purposes (S.
Rept. 107-150);
(17) To amend the Ethics in Government Act of 1978 (5
U.S.C. App.) to streamline the financial disclosure process for
Executive Branch employees (S. Rept. 107-152);
(18) To amend chapter 35 of title 44, United States
Code, for the purpose of facilitating compliance by small
business concerns with certain Federal paperwork requirements,
to establish a task force to examine the feasibility of
streamlining paperwork requirements applicable to small
business concerns, and for other purposes (S. Rept. 107-153);
(19) To amend title 44, United States Code, to require
any organization that is established for the purpose of raising
funds for creating, maintaining, expanding, or conducting
activities at a Presidential archival depository or any
facilities relating to a Presidential archival depository to
disclose the sources and amounts of any funds raised, and for
other purposes (S. Rept. 107-160);
(20) To enhance the management and promotion of
electronic government services and processes by establishing a
Federal Chief Information Officer within the Office of
Management and Budget, and by establishing a broad framework of
measures that require using Internet-based information
technology to enhance citizen access to government information
and services, and for other purposes (S. Rept. 107-174);
(21) To establish the Department of National Homeland
Security and the National Office for Combating Terrorism (S.
Rept. 107-175);
(22) To amend the Inspector General Act of 1978 (5
U.S.C. App.) to establish police powers for certain Inspector
General agents engaged in official duties and provide an
oversight mechanism for the exercise of those powers (S. Rept.
107-176);
(23) To establish the United States Consensus Council to
provide for a consensus building process in addressing national
public policy issues, and for other purposes (S. Rept. 107-
330);
(24) To amend chapter 35 of title 31, United States
Code, to expand the types of Federal agencies that are required
to prepare audited financial statements (S. Rept. 107-331);
(25) To authorize the Court Services and Offender
Supervision Agency of the District of Columbia to provide for
the interstate supervision of offenders on parole, probation,
and supervised release (S. Rept. 107-332);
(26) To provide for estimates and reports of improper
payments by Federal agencies (S. Rept. 107-333);
(27) To provide for full voting representation in
Congress for the citizens of the District of Columbia, and for
other purposes (S. Rept. 107-343);
(28) To authorize appropriations for the Merit Systems
Protection Board and the Office of Special Counsel, and for
other purposes (S. Rept. 107-349);
(29) Financial Oversight of Enron: The SEC and Private-
Sector Watchdogs, October 7, 2002 (S. Prt. 107-75);
(30) Rewriting the Rules (Majority Staff), October 24,
2002 (S. Prt. 107-76); and
(31) Enron's Credit Rating: Enron's Bankers' Contacts
with Moody's and Government Officials, January 3, 2003 (S. Prt.
107-83).
Also during the 107th Congress, 91 reports were issued by
the General Accounting Office at the request of the Committee:
(1) Potential Questions to Elicit Nominees' Views on
Agencies' Management Challenges, GAO-01-332R (January 18,
2001);
(2) Regulatory Management: Communication About
Technology-Based Innovations Can Be Improved, GAO-01-232
(February 12, 2001);
(3) Information Security: IRS Electronic Filing Systems,
GAO-01-306 (February 16, 2001);
(4) Eligibility Criteria for Individuals to Temporarily
Fill Vacant Positions Under the Federal Vacancies Reform Act of
1998, GAO-01-468R (February 23, 2001);
(5) Export Controls: Inadequate Justification for
Relaxation of Computer Controls Demonstrates Need for
Comprehensive Study, GAO-01-534T (March 15, 2001);
(6) Financial Audit: Independent and Special Counsel
Expenditures for the Six Months Ended September 30, 2000, GAO-
01-505 (March 30, 2001);
(7) Managing for Results: Human Capital Management
Discussions in Fiscal Year 2001 Performance Plans, GAO-01-236
(April 24, 2001);
(8) Internet Privacy: Implementation of Federal Guidance
for Agency Use of Cookies, GAO-01-424 (April 27, 2001);
(9) Telecommunications: Research and Regulatory Efforts
on Mobile Phone Health Issues, GAO-01-545 (May 7, 2001);
(10) Department of Defense, General Services
Administration, National Aeronautics and Space Administration:
Federal Acquisition Regulations; Electronic and Information
Technology Accessibility, GAO-01-687R (May 11, 2001);
(11) U.S. Postal Service: Financial Outlook and
Transformation Challenges, GAO-01-733T (May 15, 2001);
(12) Presidential Appointments: Agencies' Compliance
With Provisions of the Federal Vacancies Reform Act of 1998,
GAO-01-701 (May 31, 2001);
(13) Department of the Treasury: Status of Achieving Key
Outcomes and Addressing Major Management Challenges, GAO-01-712
(June 15, 2001);
(14) Health and Human Services: Status of Achieving Key
Outcomes and Addressing Major Management Challenges, GAO-01-748
(June 15, 2001);
(15) Veterans Affairs: Status of Achieving Key Outcomes
and Addressing Major Management Challenges, GAO-01-752 (June
15, 2001);
(16) National Science Foundation: Status of Achieving
Key Outcomes and Addressing Major Management Challenges, GAO-
01-758 (June 15, 2001);
(17) Department of the Interior: Status of Achieving Key
Outcomes and Addressing Major Management Challenges, GAO-01-759
(June 15, 2001);
(18) Environmental Protection Agency: Status of
Achieving Key Outcomes and Addressing Major Management
Challenges, GAO-01-774 (June 15, 2001);
(19) Social Security Administration: Status of Achieving
Key Outcomes and Addressing Major Management Challenges, GAO-
01-778 (June 15, 2001);
(20) Department of Labor: Status of Achieving Key
Outcomes and Addressing Major Management Challenges, GAO-01-779
(June 15, 2001);
(21) Department of Commerce: Status of Achieving Key
Outcomes and Addressing Major Management Challenges, GAO-01-793
(June 15, 2001);
(22) Small Business Administration: Status of Achieving
Key Outcomes and Addressing Major Management Challenges, GAO-
01-792 (June 22, 2001);
(23) Department of Transportation: Status of Achieving
Key Outcomes and Addressing Major Management Challenges, GAO-
01-834 (June 22, 2001);
(24) Department of Defense: Status of Achieving Key
Outcomes and Addressing Major Management Challenges, GAO-01-783
(June 25, 2001);
(25) Nuclear Regulatory Commission: Status of Achieving
Key Outcomes and Addressing Major Management Challenges, GAO-
01-760 (June 29, 2001);
(26) Department of Energy: Status of Achieving Key
Outcomes and Addressing Major Management Challenges, GAO-01-823
(June 29, 2001);
(27) Department of Education: Status of Achieving Key
Outcomes and Addressing Major Management Challenges, GAO-01-827
(June 29, 2001);
(28) Department of Housing and Urban Development: Status
of Achieving Key Outcomes and Addressing Major Management
Challenges, GAO-01-833 (July 6, 2001);
(29) Federal Emergency Management Agency: Status of
Achieving Key Outcomes and Addressing Major Management
Challenges, GAO-01-832 (July 9, 2001);
(30) Office of Personnel Management: Status of Achieving
Key Outcomes and Addressing Major Management Challenges, GAO-
01-884 (July 9, 2001);
(31) Electronic Government: Challenges Must Be Addressed
With Effective Leadership and Management, GAO-01-959T (July 11,
2001);
(32) FBI Intelligence Investigations: Coordination
Within Justice on Counterintelligence Criminal Matters Is
Limited, GAO-01-780 (July 16, 2001);
(33) Department of Justice: Status of Achieving Key
Outcomes and Addressing Major Management Challenges, GAO-01-729
(July 26, 2001);
(34) NASA: Status of Achieving Key Outcomes and
Addressing Major Management Challenges, GAO-01-868 (July 31,
2001);
(35) General Services Administration: Status of
Achieving Key Outcomes and Addressing Major Management
Challenges, GAO-01-931 (August 3, 2001);
(36) U.S. Agency for International Development: Status
of Achieving Key Outcomes and Addressing Major Management
Challenges, GAO-01-721 (August 17, 2001);
(37) Department of Agriculture: Status of Achieving Key
Outcomes and Addressing Major Management Challenges, GAO-01-761
(August 23, 2001);
(38) Presidential Appointments: Qualifications of Acting
Officials at the Department of Justice Under the Federal
Vacancies Reform Act of 1998, GAO-01-1083R (September 6, 2001);
(39) Public Assistance: PARIS Project Can Help States
Reduce Improper Benefit Payments, GAO-01-935 (September 6,
2001);
(40) Critical Infrastructure Protection: Significant
Challenges in Protecting Federal Systems and Developing
Analysis and Warning Capabilities, GAO-01-1132T (September 12,
2001);
(41) Homeland Security: A Framework for Addressing the
Nation's Efforts, GAO-01-1158T (September 21, 2001);
(42) Financial Audit: Independent and Special Counsel
Expenditures for the Six Months Ended March 31, 2001, GAO-01-
1035 (September 28, 2001);
(43) Electronic Government: Better Information Needed on
Agencies' Implementation of the Government Paperwork
Elimination Act, GAO-01-1100 (September 28, 2001);
(44) Financial Management: FFMIA Implementation Critical
for Federal Accountability, GAO-02-29 (October 1, 2001);
(45) Combating Terrorism: Considerations for Investing
Resources in Chemical and Biological Preparedness, GAO-02-162T
(October 17, 2001);
(46) Homeland Security: A Risk Management Approach Can
Guide Preparedness Efforts, GAO-02-208T (October 31, 2001);
(47) Financial Management: Improper Payments Reported in
Fiscal Year 2000 Financial Statements, GAO-02-131R (November 2,
2001);
(48) Ambulance Services: Changes Needed to Improve
Medicare Payment Policies and Coverage Decisions, GAO-02-244T
(November 15, 2001);
(49) NASA: Status of Plans for Achieving Key Outcomes
and Addressing Major Management Challenges, GAO-02-184
(November 27, 2001);
(50) Changed Interpretation of Requirements Related to
First Assistants Under the Federal Vacancies Reform Act of
1998, GAO-02-272R (December 7, 2001);
(51) Department of State: Status of Achieving Key
Outcomes and Addressing Major Management Challenges, GAO-02-42
(December 7, 2001);
(52) United States Postal Service: Information on
Retirement Plans, GAO-02-170 (December 31, 2001);
(53) 2000 Census: Coverage Evaluation Interviewing
Overcame Challenges, but Further Research Needed, GAO-02-26
(December 31, 2001);
(54) Managing for Results: Agency Progress in Linking
Performance Plans With Budgets and Financial Statements, GAO-
02-236 (January 4, 2002);
(55) Charitable Choice: Overview of Research Findings on
Implementation, GAO-02-337 (January 18, 2002);
(56) Human Services Integration: Results of a GAO
Cosponsored Conference on Modernizing Information Systems, GAO-
02-121 (January 31, 2002);
(57) 2000 Census: Best Practices and Lessons Learned for
More Cost-Effective Nonresponse Follow-up, GAO-02-196 (February
11, 2002);
(58) Regulatory Review: Delay of Effective Dates of
Final Rules Subject to Administration's January 20, 2001,
Memorandum, GAO-02-370R (February 15, 2002);
(59) Information Technology: Enterprise Architecture Use
Across the Federal Government Can Be Improved, GAO-02-6
(February 19, 2002);
(60) Information Resources Management: Comprehensive
Strategic Plan Needed to Address Mounting Challenges, GAO-02-
292 (February 22, 2002);
(61) U.S. Postal Service: Deteriorating Financial
Outlook Increases Need for Transformation, GAO-02-355 (February
28, 2002);
(62) Competitive Sourcing: Challenges in Expanding A-76
Government wide, GAO-02-498T (March 6, 2002);
(63) Financial Audit: Independent and Special Counsel
Expenditures for the Six Months Ended September 30, 2001, GAO-
02-443 (March 29, 2002);
(64) Electronic Government: Challenges to Effective
Adoption of the Extensible Markup Language, GAO-02-327 (April
5, 2002);
(65) Homeland Security: Responsibility and
Accountability for Achieving National Goals, GAO-02-627T (April
11, 2002);
(66) Export Controls: Rapid Advances in China's
Semiconductor Industry Underscore Need for Fundamental U.S.
Policy Review, GAO-02-620 (April 19, 2002);
(67) Performance Reporting: Few Agencies Reported on the
Completeness and Reliability of Performance Data, GAO-02-372
(April 26, 2002);
(68) Energy Markets: Concerted Actions Needed by FERC To
Confront Challenges That Impede Effective Oversight, GAO-02-656
(June 14, 2002);
(69) Homeland Security: New Department Could Improve
Coordination but May Complicate Priority Setting, GAO-02-893T
(June 28, 2002);
(70) Critical Infrastructure Protection: Federal Efforts
Require a More Coordinated and Comprehensive Approach for
Protecting Information Systems, GAO-02-474 (July 15, 2002);
(71) SEC Operations: Implications of Alternative Funding
Structures, GAO-02-864 (July 16, 2002);
(72) Contract Management: Interagency Contract Programs
Need More Oversight, GAO-02-734 (July 25, 2002);
(73) Human Capital Flexibilities, GAO-02-1050R (August
9, 2002);
(74) Financial Management: Coordinated Approach Needed
to Address the Government's Improper Payments Problems, GAO-02-
749 (August 9, 2002);
(75) Charitable Choice: Federal Guidance on Statutory
Provisions Could Improve Consistency of Implementation, GAO-02-
887 (September 10, 2002);
(76) Building Security: Interagency Security Committee
Has Had Limited Success in Fulfilling Its Responsibilities,
GAO-02-1004 (September 17, 2002);
(77) Information Management: Selected Agencies' Handling
of Personal Information, GAO-02-1058 (September 30, 2002);
(78) Financial Audit: Independent Counsel Expenditures
for the Six Months Ended March 31, 2002, GAO-02-1068 (September
30, 2002);
(79) Program Evaluation: Strategies for Assessing How
Information Dissemination Contributes to Agency Goals, GAO-02-
923 (September 30, 2002);
(80) Financial Management: FFMIA Implementation
Necessary to Achieve Accountability, GAO-03-31 (October 1,
2002);
(81) United States Postal Service: Opportunities to
Strengthen IT Investment Management Capabilities, GAO-03-3
(October 15, 2002);
(82) Nonproliferation: Strategy Needed to Strengthen
Multilateral Export Control Regimes, GAO-03-43 (October 25,
2002);
(83) Performance and Accountability: Reported Agency
Actions and Plans to Address 2001 Management Challenges and
Program Risks, GAO-03-225 (October 31, 2002);
(84) Building Security: Security Responsibilities for
Federally Owned and Leased Facilities, GAO-03-8 (October 31,
2002);
(85) Electronic Government: Selection and Implementation
of the Office of Management and Budget's 24 Initiatives, GAO-
03-229 (November 22, 2002);
(86) Human Capital: Effective Use of Flexibilities Can
Assist Agencies in Managing Their Workforces, GAO-03-2
(December 6, 2002);
(87) Information Technology Services: Agencies Complying
with Revision to Federal Acquisition Regulation, GAO-03-32
(December 18, 2002);
(88) Natural Gas: Analysis of Changes in Market Price,
GAO-03-46 (December 18, 2002);
(89) Homeland Security: Management Challenges Facing
Federal Leadership, GAO-03-260 (December 20, 2002);
(90) Results-Oriented Management: Agency Crosscutting
Actions and Plans in Drug Control, Family Poverty, Financial
Institution Regulation, and Public Health Systems, GAO-03-320
(December 20, 2002); and
(91) Results-Oriented Management: Agency Crosscutting
Actions and Plans in Border Control, Flood Mitigation and
Insurance, Wetlands, and Wildland Fire Management, GAO-03-321
(December 20, 2002).
VI. Official Communications
During the 107th Congress, 927 official communications were
referred to the Committee. Of these, 914 were Executive
Communications, 7 were Petitions or Memorials, 6 were
Presidential Messages, and 227 of the official communications
were reports on District of Columbia legislation.
VII. Legislative Actions
The Committee was highly productive in the 107th Congress.
Important legislation was reported by the Committee, approved
by Congress and signed by the President in a variety of areas
within the Committee's jurisdiction.
The following are brief legislative histories of measures
referred to the Committee and, in some cases, drafted by the
Committee, which (1) became public law; (2) were favorably
reported from the Committee and passed by the Senate; and (3)
were favorably reported from the Committee but were not subject
to further action. For information not included in this
section, refer to the Committee's Legislative Calendar.
Measures Enacted Into Law
S. 271/H.R. 93--To Provide That the Mandatory Separation Age for
Federal Firefighters Be Made the Same as the Age That Applies
With Respect To Federal Law Enforcement Officers (Public Law
107-27)
This legislation raises the mandatory separation age for
Federal firefighters from 55 to 57, which is the age that had
already applied with respect to Federal law enforcement
officers. The purpose of the legislation is to enable willing
and able Federal fire fighters to continue to serve, and to
remove the existing inequity that requires firefighters to
retire at a younger age than law enforcement officers.
S. 271 was introduced by Senator Feinstein on February 7,
2001, and garnered 12 cosponsors. The bill was referred to the
Committee and was further referred to the Subcommittee on
International Security, Proliferation and Federal Services on
March 20, 2001. The same measure had been introduced previously
in the House of Representatives as H.R. 93 on January 3, 2001,
passed the House on January 30, 2001, and was referred in the
Senate to the Committee and the Subcommittee. Both bills were
then polled out by the Subcommittee and, on August 2, 2001,
were ordered reported favorably by the Committee by voice vote;
the bills were reported the same day, without written report.
H.R. 93 passed the Senate by unanimous consent on August 3,
2001, and was signed by the President on August 20, 2001.
S. 803/H.R. 2458--The E-Government Act (Public Law 107-347)
The E-Government Act of 2002 seeks to improve the
organization and delivery of information and services over the
Internet, and establishes a new IT management framework to
transform the way government operates. Senator Lieberman (then
the Ranking Minority Member) introduced the E-Government Act on
May 1, 2001, with 11 original co-sponsors from both parties. At
a Committee hearing held on July 11, 2001, OMB Deputy Sean
O'Keefe testified in support of e-government, and promised to
work with the Committee to arrive at consensus legislation. On
March 21, 2002, the Committee unanimously ordered by voice vote
the bill reported with an amendment in the nature of a
substitute. The bill was reported to the Senate on June 24,
2002 (S. Rept. 107-174), and it passed the Senate by unanimous
consent, with an amendment to the Committee's substitute, on
June 27, 2002. In September, the House Government Reform
Committee began to consider the legislation. An agreement,
adding several new provisions, was reached between the House
and Senate Committees before final passage. The revised
legislation passed both the House and Senate, by unanimous
consent, as H.R. 2458 on November 15, 2002. The President
signed the legislation on December 17, 2002.
The Act will, among other things, create an Office of
Electronic Government, headed by a Presidentially-appointed
Administrator, to provide focused, top level-leadership on e-
government and information technology issues. The Administrator
will allocate money from a substantial E-Government Fund to
support interagency projects and other innovative programs. The
Act requires that information and services on the Internet be
organized according to citizens' needs, rather than agency
jurisdiction, and accessible from a single point, or portal.
Several provisions require that government information be
better organized and made more easily searchable. Sweeping new
privacy protections will require government officials to
consider the privacy ramifications when developing IT systems
or beginning information collections. The Act also addresses an
impending shortage of skilled information technology
professionals in the Federal workforce; requires agencies to
conduct their rule-making online; and directs courts to post
their judicial opinions and other court information. Finally,
the Act reauthorizes and makes permanent the information
security provisions originally authored by Senators Thompson
and Lieberman in the 106th Congress; the information security
provisions appearing in the final bill were expanded upon with
the addition of House legislation, the Federal Information
Security Management Act.
S. 1198--A Bill to Reauthorize Franchise Fund Pilot Programs (Public
Law 107-67)
This bill provides a one year extension of the October 2001
sunset date for the franchise fund pilot program. Under this
pilot program, created in 1994, six agencies can create
franchise funds, which are fully self-supporting business-like
entities staffed by Federal employees that compete to provide
common administrative services such as financial and
administrative systems operations. Chairman Lieberman and
Ranking Member Thompson introduced this bill on July 19, 2001.
The Committee ordered it to be reported out of Committee by
voice vote on August 2, 2001, and it was reported to the Senate
the same day without a written report. On August 3, 2001, the
bill passed the Senate by unanimous consent. At the request of
the Administration, a similar provision was included in the
Treasury and General Government Appropriations Act for fiscal
year 2002. The House passed the appropriations bill on October
31, the Senate passed it by unanimous consent on November 1,
and the President signed it into law on November 12, 2001.
S. 1202--Authorization of Appropriations for the Office of Government
Ethics (Public Law 107-119)
This legislation extends the authorization of
appropriations for the Office of Government Ethics (OGE) for 5
years, through the 2006 fiscal year. OGE was established by the
Ethics in Government Act of 1978 to help foster high ethical
standards for employees in the Executive Branch. OGE's
authorization for appropriations lapsed after September 30,
2000, and, although both the Senate and the House passed
reauthorization bills in November of that year, neither bill
was enacted.
S. 1202 was introduced by Chairman Lieberman and Ranking
Minority Member Thompson on July 19, 2001, and was referred to
the Committee. The bill was ordered favorably reported by voice
vote on August 2, 2001, was reported with a written report on
October 30, 2001 (S. Rept. 107-88), and passed the Senate by
unanimous consent on November 15, 2001. The bill then passed
the House of Representatives by voice vote under suspension of
the rules on December 20, 2001, and was signed by the President
on January 15, 2002.
S. 1256--To Provide for the Reauthorization of the Breast Cancer
Research Special Postage Stamp (Public Law 107-67)
This bill extends the sales period of the breast cancer
research postage stamp for an additional 6 years beyond its
scheduled sunset date of July 2002. The breast cancer research
stamp was the first so-called ``semi-postal'' stamp issued by
the Postal Service; it is priced to raise money for breast
cancer research in addition to covering the cost of first class
postage. As of March 2002, the stamp had raised more than $23
million for research.
The bill was introduced by Senator Feinstein on July 26,
2001 and had 86 co-sponsors. It was referred to the Committee
and was subsequently referred to the Subcommittee on
International Security, Proliferation, and Federal Services on
September 10, 2001. A revised version of the legislation was
added to the Treasury and General Government Appropriations Act
for fiscal year 2002, which extended the sales period for the
stamp until December 31, 2003. It was signed into law by the
President on November 12, 2001.
S. 1271/H.R. 327--Small Business Paperwork Relief Act (Public Law 107-
198)
The purpose of this legislation is to facilitate compliance
by small business entities with Federal paperwork requirements
and to establish a task force to examine information collection
and dissemination. The legislation aids small businesses in
understanding and complying with Federal information-collection
requirements, mandates a study of how to streamline
information-collection requirements for small businesses and
how to strengthen the dissemination of information by the
Federal Government, and directs that certain data be compiled
about enforcement activities involving small entities.
S. 1271 was introduced by Senators Voinovich, Lincoln, and
Leahy on July 30, 2001, eventually garnering 15 co-sponsors. On
November 14, 2001, the Committee agreed to an amendment in the
nature of a substitute developed by Senator Voinovich in
consultation with Chairman Lieberman, and ordered it favorably
reported. The bill was reported by the Committee on November
27, 2001, and passed the Senate by unanimous consent on
December 17, 2001. (A written report, S. Rept. 107-153, was
filed May 21, 2002.)
H.R. 327, a bill similar to S. 1271, had previously been
introduced in the House of Representatives on January 31, 2001,
passed the House on March 15, 2001, and was referred to the
Committee. Following Senate passage of S. 1271, Chairman
Lieberman and Senator Voinovich worked with the sponsors of
H.R. 327 and other interested Representatives to develop
consensus legislation, in the form of an amendment in the
nature of a substitute to H.R. 327. On May 22, 2002, by
unanimous consent, H.R. 327 was discharged from the Committee,
the consensus substitute amendment was agreed to, and the
substitute legislation was passed. The House agreed to the
substitute by unanimous consent on June 18, 2002, and the
President signed the bill June 28, 2002.
S. 1286/H.R. 2590--Child Care Affordability for Federal Employees
(Public Law 107-67)
Legislation establishing permanent authority for a child-
care benefit for Federal employees was introduced in the
Committee, and was later incorporated and enacted as part of
the Treasury, Postal and General Government Appropriations Act
for fiscal year 2002 (H.R. 2590). This measure makes permanent
a pilot program first authorized by Congress in 1999 that
allows agencies to use appropriated funds to provide childcare
for their employees, for the purpose of making childcare more
affordable for lower-income employees. The program strengthens
the Federal Government's ability to attract and retain quality
employees.
S. 1286 was introduced by Senator Carnahan on August 1,
2001, and garnered 13 co-sponsors. The bill was referred to the
Committee and on September 10, 2001 was further referred to the
Subcommittee on International Security, Proliferation and
Federal Services. The measure was incorporated by the Committee
on Appropriations into S. 1398, the Treasury and General
Government Appropriations Act for fiscal year 2002, which was
reported on September 4, 2001, incorporated by the Senate into
the corresponding House appropriations bill, H.R. 2590, and
passed on September 19, 2001. The conference report on H.R.
2590, in which the child-care measure was retained (as
Sec. 630), passed the House and Senate and, on November 12,
2001, was signed by the President.
S. 1498/S. 1438--Extending Frequent Flyer Benefits to Military
Personnel and Civilian Employees (Public Law 107-107)
Legislation extending frequent flyer benefits to Federal
military personnel and civilian employees was introduced and
ordered reported by the Committee, and was then incorporated
and enacted as part of the Defense Authorization Act for fiscal
year 2002 (S 1438; Public Law 107-107 Sec. 1116). This
legislation allows Federal personnel to make use of promotional
benefits, such as frequent flyer miles, that they receive as a
result of official government travel. The measure corrects an
inequity that exists between government and private sector
employees for work-related travel and should serve to boost
employee morale and enhance Federal recruitment and retention.
The military departments, other Executive Branch agencies, the
Judicial Branch, and the congressional instrumentalities are
covered.
S. 1498 was introduced by Chairman Lieberman on October 3,
2001, and co-sponsored by Senators Thompson, Akaka, Warner, and
Voinovich. The bill was referred to the Committee and further
referred on October 4, 2001 to the Subcommittee on
International Security, Proliferation and Federal Services. The
bill was polled out by the Subcommittee and, on November 14,
2001, the Committee ordered the bill reported favorably by
voice vote.
Previously, on September 7, 2001, the Senate Armed Services
Committee had ordered reported the National Defense
Authorization Act for Fiscal Year 2002, S. 1416, including a
limited version of the frequent flyer measure that had been
offered by Senators Lieberman and Warner in their capacities,
respectively, as a Member and the Ranking Member of that
Committee. A later version of the defense authorization
legislation, including the limited frequent flyer measure, was
introduced as S. 1438 on September 19, 2001, and passed the
Senate on October 2, 2001. After the Governmental Affairs
Committee's favorable action on S. 1498, the conferees
considering S. 1438 incorporated the full text of S. 1498 into
the conference report, which was filed on December 12, 2001 (H.
Rept. 107-333), passed the House and Senate on December 13,
2002 (when Chairman Lieberman placed a section-by-section
description of the frequent-flyer measure into the
Congressional Record, printed at pages S 13137-S 13138), and
was signed by the President on December 28, 2001.
S. 1713--Rural Service Improvement Act of 2002 (Public Law 107-206)
This legislation was introduced by Senator Stevens on
November 15, 2001 to improve and reduce the costs to the United
States Postal Service of the Alaska bypass mail program. This
program uses a system of contract aircraft to deliver mail and
supplies to remote areas of Alaska. On May 22, 2002, S. 1713
was ordered to be reported out of the Committee by voice vote,
with an amendment in the nature of a substitute. Its provisions
were included as Sec. 3002 of the supplemental appropriations
bill for Fiscal Year 2002, which was signed into law by the
President on August 2, 2002.
S. 1780/H.R. 5005--Federal Emergency Procurement Flexibility Act of
2001 (Public Law 107-296)
Ranking Minority Member Thompson introduced this
legislation on December 6, 2001, to provide increased
flexibility government-wide for the procurement of property and
services that might facilitate the defense against terrorism.
The bill provides a 2-year authorization of streamlined
acquisition authorities and procedures for certain purchases
and contracts related to humanitarian operations and defenses
against terrorism or a nuclear, biological, chemical or
radiological attack. Related legislation--without the 2-year
limitation--was later included in the Homeland Security Act,
H.R. 5005 (at Sec. Sec. 851-858), which was signed into law on
November 25, 2002.
S. 1822/H.R. 3340--Allowing Catch-up Contributions to the Thrift
Savings Plan by Participants Age 50 and Over (Public Law 107-
304)
This legislation allows Federal employees who participate
in the Thrift Savings Plan (TSP) and are over 50 years old to
take advantage of ``catch-up'' contributions, allowing the
Federal Government's tax-deferred plan to do what private
sector plans may already choose to do. An earlier change in the
tax code applied to both private and public tax qualified
plans, including the TSP, but this program could not be
initiated for the TSP until the implementing amendments in this
legislation were enacted.
S. 1822 was introduced by Senator Akaka on December 13,
2001, and was referred to the Committee and further referred to
the Subcommittee on International Security, Proliferation and
Federal Services. The bill was polled out of the Subcommittee
and, on March 21, 2002, was ordered reported by the Committee
by voice vote. In the House of Representatives, the measure was
introduced on November 19, 2001, as H.R. 3340 and, with two
unrelated measures added to the bill, was passed by the House
on October 7, 2002. The Senate passed H.R. 3340 by unanimous
consent on November 13, 2002, and the President signed the bill
on November 27, 2002.
S. 1867/H.R. 4628--To Establish the National Commission on Terrorist
Attacks Upon the United States (Public Law 107-306)
This bill establishes a blue-ribbon independent commission
to investigate the facts and circumstances of the terrorist
attacks of September 11, 2001, and to report its findings and
recommendations to the President and Congress.
Chairman Lieberman introduced S. 1867, with Senator McCain
as chief co-sponsor on December 20, 2001. The Commission's
scope will extend to all relevant areas, including intelligence
agencies, law enforcement agencies, diplomacy, immigration, the
flow of assets to terrorist organizations, commercial aviation,
and other areas of the public and private sectors. The
Commission has subpoena power, and is directed to report its
findings within 18 months.
On March 21, 2002, by unanimous voice vote, the Committee
ordered the bill reported with an amendment in the nature of a
substitute; the bill was reported on May 14, 2002 (S. Rept.
107-150). On September 24, 2002, the Senate adopted a slightly
modified version of the commission legislation as an amendment
to Homeland Security legislation, H.R. 5005, by a vote of 90-8.
The commission language was later removed from the final
version of the Homeland Security Act. On November 15, 2002, the
House and Senate adopted a modified version of S. 1867 as an
addition to the conference report of the Intelligence
Authorization Act of 2002, H.R. 4628 (Title VI). The Act was
signed into law on November 27, 2002.
S. 2452/H.R. 5005--To Establish the Department of Homeland Security
(Public Law 107-296)
This landmark legislation fundamentally reorganized the
Federal Government for the 21st Century to meet the threat of
terrorism and other threats to our homeland security. With an
organizational structure based largely on legislation
introduced and developed first by Chairman Lieberman, the
Homeland Security Act of 2002 (HSA) represents the most
significant reorganization of our Nation's government in a half
century. It has combined key agencies with responsibilities for
homeland security into a single agency, that is led by a
Senate-confirmed Secretary. It focuses leadership and resources
on key areas for securing our homeland by creating directorates
within the Department for: (1) information analysis and
infrastructure protection, (2) border and transportation
security, (3) emergency preparedness and response, and (4)
science and technology. Some 170,000 employees will work for
the new Department.
The HSA is the result of over a year of deliberations begun
on October 11, 2001, when Chairman Lieberman introduced
legislation (S. 1534) with Senator Specter to create a
Department of Homeland Security. After the Committee held
hearings to examine ways to improve the government's
organization to protect our homeland, S. 1534 was combined with
legislation by Senator Graham, creating a White House Office
for Combating Terrorism, and became S. 2452, which was ordered
reported by the Committee with amendments on May 22, 2002. The
bill was reported to the Senate on June 24, 2002 (S. Rept. 107-
175). Before the Senate had a chance to consider that bill,
however, the President dropped his opposition to the
legislation and announced his support for a Department of
Homeland Security and released his own proposed legislation to
create such a Department.
The Committee held further hearings to consider the
Administration's proposals, and Senator Lieberman prepared an
amendment to S. 2452 that was considered, and approved, at a
July 24-25 business meeting of the Committee. That expanded
version of S. 2452 went a considerable way to incorporate
important elements of the Administration's organizational
proposals as well as key proposals from Committee members,
including ground-breaking consensus provisions on civil service
reform prepared by Senators Voinovich and Akaka. The Committee
bill did not include the Administration's broad provisions to
rewrite personnel rules, remove assurances that collective
bargaining rights would not be taken away from employees of the
new Department, and turn over broad authority to the Executive
Branch in a number of areas, including appropriations and
reorganizations.
In late July, the House of Representatives passed its
version of the Homeland Security Department bill, H.R. 5005.
This House bill became the base bill for floor consideration in
the Senate, and on September 4, 2002, the amended version of S.
2452 was offered on the Senate floor as S. Amdt. 4471 to H.R.
5005. Debate on H.R. 5005 continued in the Senate through
September and October of 2002. A significant portion of the
debate focused on whether the Administration would be granted
broad new authorities to rewrite rules of collective bargaining
and civil service protections. A number of cloture motions were
unsuccessful. On November 13, 2002, the House passed another
version of the legislation (H.R. 5710); the text of H.R. 5710
was subsequently offered in the Senate as a full substitute to
H.R. 5005. On November 19, 2002, the Senate passed the
legislation by a vote of 90-9. The House agreed to the Senate
amendment by unanimous consent on November 22, 2002. President
Bush signed the Department of Homeland Security Act of 2002
(H.R. 5005; Public Law 107-296) into law on November 25, 2002.
As enacted, H.R. 5005 is very similar in its organizational
components to the legislation that was approved by the Senate
Governmental Affairs Committee. However, the legislation
differed from the Committee-approved bill in some significant
respects, including the authority granted to the Secretary to
alter civil service procedures and remedies and collective
bargaining rights of employees of the new Department.
S. 2527/H.R. 3340--Providing Coverage under the Federal Employees
Health Benefit Plan for Employees of the Oversees Private
Investment Corporation, Now Under a Separate Plan (Public Law
107-304)
This legislation, introduced at the request of the Overseas
Private Investment Corporation (OPIC), allows OPIC to terminate
its separate employee health insurance plan by transferring
about 40 employees and retirees from the plan to the
government-wide Federal Employees Health Benefit Program
administered by the Office of Personnel Management. Due to
rising healthcare costs and other factors, it had become
inefficient and impractical for OPIC to continue offering a
separate employee health plan.
S. 2527 was introduced by Senator Akaka and Senator
Cochran, on May 16, 2002, and was referred to the Committee and
further referred to the Subcommittee on International Security,
Proliferation and Federal Services. After being polled out by
the Subcommittee, S. 2527 was ordered reported by the Committee
on October 9, 2002 by a roll call vote of 9-0, was reported on
October 15, 2002 without written report, and passed the Senate
by unanimous consent on October 17, 2002. The same legislation
had been added to H.R. 3340 (as Sec. 4) as it passed the House
of Representatives on October 7, 2002. The Senate passed H.R.
3340 by unanimous consent on November 13, 2002, and the
President signed the bill on November 27, 2002.
S. 2530/H.R. 5005--Provides Law Enforcement Powers for Inspector
General Agents (Public Law 107-296)
Legislation to provide law enforcement powers to Inspector
General agents was reported by the Committee and passed by the
Senate as a separate bill, and was then incorporated by the
Committee and enacted as part of the Homeland Security Act.
This legislation provides specific statutory authority for the
Attorney General to grant certain law enforcement powers to
presidentially-appointed Federal Inspectors General and their
investigative personnel. Criminal investigators for the Offices
of Inspector General (OIGs) have been exercising law
enforcement authorities for many years under designations as
Special Deputy U.S. Marshals. Since 1995, virtually all
criminal investigators in OIGs have exercised law enforcement
authorities under office-wide deputations, which are renewed
biannually. However, this arrangement was burdensome on the
U.S. Marshals Service, lacked sufficient oversight of the use
of law enforcement authority by IGs, and risked a lapse in
authority at the time of renewal. The purpose of the new
legislation is to relieve the administrative burdens, provide
additional oversight, and ensure that criminal investigations
are not interrupted by lapses in the current deputation
process.
S. 2530 was introduced by Ranking Minority Member Thompson
and Chairman Lieberman on May 16, 2002, and referred to the
Committee. The Committee ordered the bill reported by voice
vote on May 22, 2002, and the bill was reported with a written
report on June 25, 2002 (S. Rept. 107-176). The Chairman then
incorporated this legislation into his revised version of the
Homeland Security Act, S. 2452, which the Committee endorsed,
with amendments, on July 25, 2002. On October 17, 2002, S. 2530
passed the Senate by unanimous consent, with an amendment. The
Committee's IG measure was ultimately incorporated into the
final version of H.R. 5005 (Sec. 812), which passed the Senate
on November 19, 2002, passed the House on November 22, 2002,
and was signed by the President on November 25, 2002.
S. 2644/H.R. 4685--Accountability of Tax Dollars Act of 2002 (Public
Law 107-289)
S. 2644 was introduced by Senator Fitzgerald on June 19,
2002 to expand the types of Federal agencies that are required
to prepare audited financial statements each year, beginning in
March 2003. Prior to the introduction of this bill, only the 24
major departments and agencies were required by law to do so,
although several independent agencies such as the Federal
Communications Commission and the Federal Trade Commission were
doing so voluntarily. The bill was ordered to be reported out
by the Committee on October 9, 2002 by a roll call vote of 9-0,
with a substitute amendment offered by Senator Fitzgerald that
conformed its provisions to those of H.R. 4685 as passed by the
House. The bill was reported on October 16, 2002, and a written
report was filed on November 4, 2002 (S. Rept. 107-331). The
Senate passed H.R. 4685 by unanimous consent on October 17,
2002, and that legislation was signed into law by the President
on November 7, 2002.
S. 2651/H.R. 5005--Federal Workforce Improvement Provisions (Public Law
107-296)
A number of measures to improve management of the Federal
workforce government-wide were considered by the Committee as
part of a stand-alone bill, and were then incorporated by the
Committee and enacted as part of the Homeland Security Act.
These measures include provisions: to require that each agency
have a Chief Human Capital Officer to assist in managing a
high-quality workforce, to loosen some of the civil service
rules governing the hiring of employees, and to increase
authority to grant voluntary separation incentive pay and
voluntary early retirement as tools for shaping the workforce.
S. 2651, the Federal Workforce Improvement Act of 2002, was
introduced by Senator Voinovich on June 20, 2002, and was
referred to the Committee and further referred to the
Subcommittee on International Security, Proliferation and
Federal Services (ISPFS). This bill built on provisions of S.
1603, which Senator Voinovich had introduced on October 31,
2001.
Senators Voinovich and Akaka reached agreement on several
measures from S. 2651, and offered them during the Committee's
consideration of the Chairman's amendment in the nature of a
substitute to S. 2452, the Homeland Security Act. The Committee
agreed by voice vote to the Voinovich/Akaka amendment, and, on
July 25, 2002, voted to endorse the Chairman's substitute, with
amendments. These Federal workforce provisions were ultimately
incorporated into the final version of H.R. 5005 (Title XIII),
which passed the Senate on November 19, 2002, passed the House
on November 22, 2002, and was signed by the President on
November 25, 2002.
S. 3044--Court Services and Offender Supervision Agency Interstate
Supervision Act of 2002 (Public Law No. 107-302)
The bill makes clear that the Court Services and Offender
Supervision Agency of the District of Columbia (CSOSA) is
responsible for arranging for the supervision of District of
Columbia parolees, probationers, and released offenders who
seek to move out of the District of Columbia, and also for
supervising parolees, probationers, and released offenders from
other States and U.S. territories who seek to move to the
District of Columbia. In addition, in order for the agency to
meet these interstate obligations, the bill authorizes CSOSA to
enter into an Interstate Compact for Adult Offender Supervision
or other agreements with other States and U.S. territories. S.
3044 was introduced by Senator Durbin on October 3, 2002, and
was ordered to be reported without amendment by the Committee
on October 9, 2002 by a roll call vote of 9-0. The bill was
reported to the Senate on October 15, 2002, and a written
report was filed on November 4, 2002 (S. Rept. 107-332). The
Senate passed the bill by unanimous consent on November 13,
2002, and the bill was passed by the House of Representatives
on November 15, 2002. The President signed S. 3044 into law on
November 26, 2002.
S. 3070/H.R. 3340--Reauthorizing Appropriations for the Merit Systems
Protection Board and the Office of Special Counsel (Public Law
No. 107-304)
The Merit Systems Protection Board (MSPB) and the Office of
Special Counsel (OSC) administer programs and procedures to
safeguard the Federal Government's merit-based system of
employment and protect Federal employees against improper
personnel practices, particularly those Federal employees who
step forward to disclose government waste, fraud, and abuse.
The authorization for appropriations for MSPB expired in 2002
and for OSC expired in 1997; this legislation extends the
authorizations through the end of the 2007 fiscal year.
S. 3070 was introduced by Senators Akaka and Levin on
October 8, 2002, and was referred to the Committee. In addition
to the reauthorization provisions, this bill contained a number
of measures to clarify and strengthen the protection of
whistleblowers against reprisal, building on provisions
introduced by these and other Senators in S. 2829 and S. 995.
S. 3070 also removes the requirement for OSC to return all
documents to the whistleblower in all disclosure cases that are
closed without referral to an agency head. The bill was ordered
reported by the Committee on October 9, 2002 by a roll call
vote of 9-0, and was reported with a written report (S. Rept.
107-349) on November 19, 2002. The same provisions
reauthorizing the MSPB and OSC for 5 years and relieving OSC of
the requirement to return documents (but not the additional
whistleblower provisions) had been added to H.R. 3340 (at
Sec. Sec. 2-3) as it passed the House of Representatives on
October 7, 2002. The Senate passed H.R. 3340 by unanimous
consent on November 13, 2002, and the President signed the bill
on November 27, 2002.
H.R. 169/S. 201--Notification and Federal Employee Antidiscrimination
and Retaliation Act of 2002 (Public Law 107-174)
This bill seeks to hold Federal agencies financially
accountable for violations of discrimination and whistleblower
protection laws. The Act requires Federal agencies to reimburse
the Treasury for settlements and judgments paid to employees as
a result of antidiscrimination and whistleblower protection
complaints. Prior to the enactment of this law, agencies paid
these costs when complaints were resolved administratively, but
not when monetary relief (whether by settlement or judicial
judgment) followed the filing of a lawsuit. In such cases, the
costs were generally paid by the Judgment Fund, a permanently
authorized fund administered by the Treasury.
H.R. 169 was introduced on January 3, 2001 by
Representative James Sensenbrenner. On October 2, 2001, the
House unanimously passed the legislation and on October 3,
2001, H.R. 169 was referred to the Committee. Similar
legislation, the Federal Employees Protection Act of 2001, was
introduced on January 29, 2001 by Senator John Warner as S. 201
and was referred to the Committee. The Subcommittee on
International Security, Proliferation, and Federal Services
considered both bills and polled out H.R. 169 and S. 201 on
March 19, 2002. On March 21, 2002, the Committee ordered
reported by voice vote H.R. 169 with amendments. On April 15,
2002, the Committee ordered the bill reported to the Senate (S.
Rept. 107-143). The bill was adopted by the Senate, with
additional amendments, by unanimous consent on April 23, 2002.
The House passed the bill under suspension of the rules on
April 30, 2002; it was signed into law by the President on May
15, 2002.
H.R. 1042--To Prevent the Elimination of Certain Reports (Public Law
107-74)
This bill prevents the elimination of certain reports
pursuant to the requirements of the Federal Reports Elimination
and Sunset Act of 1995. That law eliminated or modified
approximately 200 reporting requirements imposed on Federal
agencies in law and by Congress, and placed a 4-year sunset on
many other reports. The legislation was designed to reduce
paperwork burdens, streamline information flows, and save
taxpayer dollars used to prepare reports that are no longer
necessary. The bill put the burden on the President and
Congressional committees to determine which reports they
believed were necessary and which were not--and it gave them 4
years to do it.
The House Science Committee subsequently determined that 29
reports relevant to its oversight responsibilities, which would
be eliminated pursuant to the sunset provisions of Federal
Reports Elimination and Sunset Act of 1995, were still
necessary. H.R. 1042 exempts these and other reports from
elimination.
H.R. 1042 was introduced in the House of Representatives by
Representative Felix Grucci on March 15, 2001. On March 21,
2001, the House passed the legislation under suspension of the
rules. On March 22, 2001, the legislation was referred in the
Senate to the Committee. On August 2, 2001, the Committee
ordered the bill by voice vote to be reported without
amendment; the bill was reported to the Senate on October 31,
2001 (S. Rept. 107-90). On November 15, 2001, H.R. 1042 was
passed by the Senate without amendment by unanimous consent.
The legislation was signed into law on November 28, 2001.
H.R. 1499--District of Columbia College Access Improvement Act of 2002
(Public Law 107-157)
This bill expands the District of Columbia Tuition
Assistance Grant program to provide grants to eligible District
residents to attend Historically Black Colleges nationwide, and
to make eligible those District residents meeting certain
specified criteria who graduated high school in or after 1998
or who were attending eligible institutions at the time of
enactment of H.R. 1499, no matter when they graduated high
school. H.R. 1499 was introduced in the House of
Representatives on April 4, 2001 by Representative Eleanor
Holmes Norton. It passed the House under suspension of the
rules on July 30, 2001. The Committee ordered H.R. 1499 to be
reported by voice vote with an amendment in the nature of a
substitute on November 14, 2001; the bill was reported on
November 29, 2001 (S. Rept. 107-101). The bill, as amended,
passed the Senate on December 12, 2001 by unanimous consent,
and passed the House of Representatives with further amendments
on March 12, 2002. The Senate cleared the final version of the
legislation on March 14, 2002 by unanimous consent and the
President signed H.R. 1499 into law on April 4, 2002.
H.R. 2061--To Amend the Charter of Southeastern University of the
District of Columbia (Public Law 107-93)
H.R. 2061 lifts the requirement in the charter of
Southeastern University, which was incorporated by an act of
Congress in 1937, that one third of its Board of Trustees
consist of alumni. H.R. 2061 was introduced in the House on
June 5, 2001 by Representative Eleanor Holmes Norton. It passed
the House under suspension of the rules on September 20, 2001.
The Committee ordered H.R. 2061 be reported without amendment
on November 14, 2001, by voice vote; the bill was reported on
November 29, 2001 (S. Rept. 107-102), and it passed the Senate
by unanimous consent on December 6, 2001. The President signed
the bill into law on December 21, 2001.
H.R. 2199--District of Columbia Police Coordination Amendment Act of
2001 (Public Law 107-113)
This bill corrects a drafting error in Section 11712(d) of
the National Capital Revitalization and Self-Government
Improvement Act of 1997 (D.C. Code, Sec. 4-192(d), recodified
at D.C. Code, Sec. 5-133.17), in order to permit all Federal
enforcement agencies in the District of Columbia to enter into
cooperative agreements with the Metropolitan Police Department
to further crime prevention and law enforcement in Washington,
D.C. The 1997 Act contained a list of enforcement agencies that
omitted mention of one.
H.R. 2199 was introduced in the House on June 14, 2001 by
Representative Eleanor Holmes Norton. On September 25, 2001,
the House passed the bill under suspension of the rules. The
Committee ordered H.R. 2199 reported without amendment on
November 14, 2001, by voice vote; the bill was reported on
November 29, 2001 (S. Rept. 107-103). The bill and a technical
amendment were passed by the Senate by unanimous consent on
December 11, 2001, and the bill, as amended, passed the House
of Representatives under suspension of the rules on December
19, 2001. H.R. 2199 was signed into law by the President on
January 8, 2002.
H.R. 2305--Criminal Justice Coordinating Council Restructuring Act of
2001 (Public Law 107-180)
This bill authorizes the heads of six Federal agencies,
specifically, the Court Services and Offender Supervision
Agency for the District of Columbia, the District of Columbia
Pretrial Services Agency, the United States Attorney for the
District of Columbia, the Federal Bureau of Prisons, the United
States Parole Commission, and the United States Marshals
Service, to meet regularly with District law enforcement
officials as the ``Criminal Justice Coordinating Council.''
H.R. 2305 authorizes Federal participation and funds for the
Council, and requires it to submit to the President, Congress,
and appropriate Federal and local agencies an annual report
detailing its activities. H.R. 2305 was introduced by
Representative Constance Morella on June 25, 2001, and was
passed by the House of Representatives under suspension of the
rules on December 4, 2001. The Committee ordered H.R. 2305
reported without amendment on March 21, 2002, by voice vote;
the bill was reported on April 29, 2002 (S. Rept. 107-145), and
the Senate passed the bill by unanimous consent on May 7, 2002.
The President signed H.R. 2305 into law on May 20, 2002.
H.R. 2336--Reauthorizing the Judiciary to Redact Judges' Financial
Disclosure Statements (Public Law 107-126)
A 1998 amendment to the Ethics in Government Act authorized
the Judicial Conference to redact a judge's financial
disclosure statement to prevent the release of information that
could endanger the judge, subject to a 3-year sunset expiring
on December 31, 2001. H.R. 2336, as introduced, would have
removed the sunset and made the authority permanent. In
response to concerns expressed by Members of the Committee and
other Senators about the redaction authority and the
judiciary's implementation of it, the bill was amended before
passage by the Senate to extend the sunset for 4 years, rather
than making redaction authority permanent.
The bill was introduced in the House of Representatives on
June 27, 2001, and was passed on a motion to suspend the rules
on October 16, 2001. The bill was received in the Senate and
referred to the Committee. The Committee ordered the bill
reported without amendment on November 14, 2001 by voice vote,
and reported the bill with a written report (S. Rept. 107-111)
on December 7, 2001. The Senate passed the bill by unanimous
consent, with an amendment, on December 11, 2001. The House
passed the bill, as amended by the Senate, under suspension of
the rules on December 20, 2001, and the President signed the
bill on January 16, 2002.
H.R. 2559--Amendments to the Long-Term Care Insurance Program (Public
Law 107-104)
In the 106th Congress, the Committee reported out
legislation that became law, the Long-Term Care Security Act,
establishing a program under which qualified Federal personnel
and retirees receiving an annuity could purchase long-term care
insurance from one or more private insurance carriers. H.R.
2559 amends the Act to--(1) exempt premiums under the program
from State and local taxes, making the Act more consistent with
other insurance programs for Federal employees and making the
program more affordable to potential enrollees, and (2) expand
coverage to include retired Federal employees who are not yet
receiving an annuity but who are entitled to a deferred
annuity.
H.R. 2559 was introduced in the House of Representatives on
July 18, 2001, and passed the House under suspension of the
rules on October 30, 2001. The bill was received in the Senate,
was referred to the Committee, and was further referred to the
Subcommittee on International Security, Proliferation and
Federal Services. The bill was polled out of the Subcommittee,
was ordered reported by the Committee on November 14, 2001, by
voice vote, and was reported on November 27, 2001. A written
report (S. Rept. 107-128) was filed on December 18, 2001. The
bill passed the Senate by unanimous consent on December 17,
2001, and the President signed the bill on December 27, 2001.
H.R. 2657/S. 1382--District of Columbia Family Court Act of 2001
(Public Law No. 107-108)
This bill redesignates the Family Division of the Superior
Court of the District of Columbia as the Family Court of the
Superior Court, and makes structural changes in the Court in an
effort to promote recruitment and retention of judges trained
and experienced in family law, and to provide consistency and
efficiency in the assignment of judges. In order to ensure that
all families receive the benefits of this expert court, the
bill requires that all family cases be heard by the court, with
all those pending at the time of enactment to be transferred to
the dockets of judges or magistrates sitting on the Family
Court bench. To enhance consistency and expertise of the court,
the bill requires that Family Court judges serve 5 year terms.
The bill also treats hearing commissioners, who have
significant expertise in family law, as magistrates to give
them additional power to move cases. In addition, in order to
help dispose of the thousands of abuse and neglect cases
pending before the court, the bill authorizes the hiring of
additional magistrates and the appointment of a special master.
Finally, the bill requires the court to have on-site a social
services liaison and to establish an electronic case management
and tracking system to be integrated with the systems of D.C.
agencies providing social services to children and families.
H.R. 2657 was introduced by Representative Tom DeLay on
July 26, 2001. A related bill, S. 1382, was introduced on
August 3, 2001, by Senator DeWine, with Senator Landrieu
cosponsoring. The House of Representatives passed H.R. 2657
under suspension of the rules on September 20, 2001; the bill
was referred to the Committee, and subsequently referred to the
Subcommittee on Oversight of Government Management,
Restructuring and the District of Columbia. The Committee
ordered both H.R. 2657 and S. 1382 be reported with amendments
in the nature of a substitute on November 14, 2001, by voice
vote; the bills were reported on December 5, 2001 (S. Rept.
107-107; S. Rept. 107-108). H.R. 2657 and an amendment were
passed by the Senate by unanimous consent on December 14, 2001.
The House of Representatives passed the bill, as amended, under
suspension of the rules on December 19, 2001. The President
signed H.R. 2657 into law on January 8, 2002.
H.R. 3925/S. 1913--Digital Tech Corps Act of 2002 (Public Law 107-347)
Representative Tom Davis introduced this legislation on
March 12, 2002, based on similar legislation he had introduced
on July 31, 2001 as H.R. 2678. Senator Voinovich introduced
companion legislation on February 6, 2002, which was referred
to the Committee. It was further referred to the Subcommittee
on International Security, Proliferation, and Federal Services
on April 24, 2002. The legislation authorized the exchange of
information technology workers between private sector
organizations and government agencies, for periods of 6 months
to 2 years. H.R. 3925 passed the House on April 10, 2002, and
was referred to the Committee. Similar provisions were included
in H.R. 2458, the E-Government Act (at Sec. 209(c)), which was
enacted on December 17, 2002.
H.R. 4878--Improper Payments Reduction Act of 2002 (Public Law 107-300)
H.R. 4878 requires Federal agencies to identify programs
that are vulnerable to improper payments and to estimate
annually the amount of underpayments and overpayments made by
these programs, whether by the agency or through a contractor
or other third party administering the program. The bill is
intended to reduce the billions of dollars in improper payments
made by Federal agencies each year. Representative Stephen Horn
introduced the bill on June 6, 2002, and it passed the House on
July 9, 2002. The bill was ordered to be reported out by the
Committee on October 9, 2002 by a roll call vote of 9-0 with an
amendment in the nature of a substitute, and it was reported on
October 15, 2002. A written report was filed on November 4,
2002 (S. Rept 107-333). The Senate passed the measure by
unanimous consent on October 17, 2002, and the House agreed to
the amended version on November 12, 2002. On November 26, 2002,
the President signed H.R. 4878 into law.
Postal Naming Bills
S. 737, a bill to designate the facility of the United
States Postal Service located at 811 South Main Street in
Yerington, Nevada, as the ``Joseph E. Dini, Jr. Post Office''
(Public Law 107-144).
S. 970, a bill to designate the facility of the United
States Postal Service located at 39 Tremont Street, Paris Hill,
Maine, as the ``Horatio King Post Office Building'' (Public Law
107-145).
H.R. 132, a bill to designate the facility of the United
States Postal Service located at 620 Jacaranda Street in Lanai
City, Hawaii, as the ``Goro Hokama Post Office Building''
(Public Law 107-6).
H.R. 364, a bill to designate the facility of the United
States Postal Service located at 5927 Southwest 70th Street in
Miami, Florida, as the ``Marjory Williams Scrivens Post
Office'' (Public Law 107-29).
H.R. 395, a bill to designate the facility of the United
States Postal Service located at 2305 Minton Road in West
Melbourne, Florida, as the ``Ronald W. Reagan Post Office of
West Melbourne, Florida'' (Public Law 107-7).
H.R. 669, a bill to designate the facility of the United
States Postal Service located at 127 Social Street in
Woonsocket, Rhode Island, as the ``Alphonse F. Auclair Post
Office Building'' (Public Law 107-261).
H.R. 670, a bill to designate the facility of the United
States Postal Service located at 7 Commercial Street in
Newport, Rhode Island, as the ``Bruce F. Cotta Post Office
Building'' (Public Law 107-262).H.R. 821, a bill to designate
the facility of the United States Postal Service located at
1030 South Church Street in Asheboro, North Carolina, as the
``W. Joe Trogdon Post Office Building'' (Public Law 107-32).
H.R. 1183/S. 985, a bill to designate the facility of the
United States Postal Service located at 113 South Main Street
in Sylvania, Georgia, as the ``G. Elliot Hagan Post Office
Building'' (Public Law 107-34).
H.R. 1366/S. 2217, a bill to designate the facility of the
United States Postal Service located at 3101 West Sunflower
Avenue in Santa Ana, California, as the ``Hector G. Godinez
Post Office Building'' (as, Public Law 107-190).
H.R. 1374, a bill to designate the facility of the United
States Postal Service located at 600 Calumet Street in Lake
Linden, Michigan, as the ``Philip E. Ruppe Post Office
Building'' (Public Law 107-191).
S. 1906, a bill to designate the facility of the United
States Postal Service located at 3698 Inner Perimeter Road in
Valdosta, Georgia, as the ``Major Lyn McIntosh Post Office
Building'' (Public Law 107-160).
H.R. 1748, a bill to designate the facility of the United
States Postal Service located at 805 Glen Burnie Road in
Richmond, Virginia, as the ``Tom Bliley Post Office Building''
(Public Law 107-161).
H.R. 1749, a bill to designate the facility of the United
States Postal Service located at 685 Turnberry Road in Newport
News, Virginia, as the ``Herbert H. Bateman Post Office
Building'' (Public Law 107-162).
H.R. 1753, a bill to designate the facility of the United
States Postal Service located at 419 Rutherford Avenue, N.E.,
in Roanoke, Virginia, as the ``M. Caldwell Butler Post Office
Building'' (Public Law 107-35)
H.R. 1761, a bill to designate the facility of the United
States Postal Service located at 8588 Richmond Highway in
Alexandria, Virginia, as the ``Herb Harris Post Office
Building'' (Public Law 107-92).
H.R. 1766, a bill to designate the facility of the United
States Postal Service located at 4270 John Marr Drive in
Annandale, Virginia, as the ``Stan Parris Post Office
Building'' (Public Law 107-85).
H.R. 2043/S. 1181, a bill to designate the facility of the
United States Postal Service located at 2719 South Webster
Street in Kokomo, Indiana, as the ``Elwood Haynes `Bud' Hillis
Post Office Building'' (Public Law 107-36).
H.R. 2261/S. 1184, a bill to designate the facility of the
United States Postal Service located at 2853 Candler Road in
Decatur, Georgia, as the ``Earl T. Shinhoster Post Office''
(Public Law 107-86).
H.R. 2454/S. 1381, a bill to redesignate the facility of
the United States Postal Service located at 5472 Crenshaw
Boulevard in Los Angeles, California, as the ``Congressman
Julian C. Dixon Post Office'' (Public Law 107-88).
H.R. 2577, a bill to designate the facility of the United
States Postal Service located at 310 South State Street in St.
Ignace, Michigan, as the ``Bob Davis Post Office Building''
(Public Law 107-163).
H.R. 2876, a bill to designate the facility of the United
States Postal Service located in Harlem, Montana, as the
``Francis Bardanouve United States Post Office Building''
(Public Law 107-164).
H.R. 2910, a bill to designate the facility of the United
States Postal Service located at 3131 South Crater Road in
Petersburg, Virginia, as the ``Norman Sisisky Post Office
Building'' (Public Law 107-165).
H.R. 3034/S. 1222, a bill to redesignate the facility of
the United States Postal Service located at 89 River Street in
Hoboken, New Jersey, as the ``Frank Sinatra Post Office
Building'' (Public Law 107-263).
H.R. 3072, a bill to designate the facility of the United
States Postal Service located at 125 Main Street in Forest
City, North Carolina, as the ``Vernon Tarlton Post Office
Building'' (Public Law 107-166).
H.R. 3248, a bill to designate the facility of the United
States Postal Service located at 65 North Main Street in
Cranbury, New Jersey, as the ``Todd Beamer Post Office
Building'' (Public Law 107-129).
S. 2907, a bill to redesignate the facility of the United
States Postal Service located at 900 Brentwood Road, NE, in
Washington, D.C., as the ``Joseph Curseen, Jr. and Thomas
Morris, Jr. Processing and Distribution Center'' (Public Law
107-225).
H.R. 3379, a bill to designate the facility of the United
States Postal Service located at 375 Carlls Path in Deer Park,
New York, as the ``Raymond M. Downey Post Office Building''
(Public Law 107-167).
H.R. 3738, a bill to designate the facility of the United
States Postal Service located at 1299 North 7th Street in
Philadelphia, Pennsylvania, as the ``Herbert Arlene Post Office
Building'' (Public Law 107-264).
H.R. 3739, a bill to designate the facility of the United
States Postal Service located at 6150 North Broad Street in
Philadelphia, Pennsylvania, as the ``Rev. Leon Sullivan Post
Office Building'' (Public Law 107-265).
H.R. 3740, a bill to designate the facility of the United
States Postal Service located at 925 Dickinson Street in
Philadelphia, Pennsylvania, as the ``William A. Cibotti Post
Office Building'' (Public Law 107-266).
H.R. 3789/S. 1970, a bill to designate the facility of the
United States Postal Service located at 2829 Commercial Way in
Rock Springs, Wyoming, as the ``Teno Roncalio Post Office
Building'' (Public Law 107-192).
H.R. 3960, a bill to designate the facility of the United
States Postal Service located at 3719 Highway 4 in Jay,
Florida, as the ``Joseph W. Westmoreland Post Office Building''
(Public Law 107-193).
H.R. 4102/S. 2840, a bill to designate the facility of the
United States Postal Service located at 120 North Maine Street
in Fallon, Nevada, as the ``Rollan D. Melton Post Office
Building'' (Public Law 107-267).
H.R. 4486/S. 2433, a bill to designate the facility of the
United States Postal Service located at 1590 East Joyce
Boulevard in Fayetteville, Arkansas, as the ``Clarence B. Craft
Post Office Building'' (Public Law 107-194).
H.R. 4717, a bill to designate the facility of the United
States Postal Service located at 1199 Pasadena Boulevard in
Pasadena, Texas, as the ``Jim Fonteno Post Office Building''
(Public Law 107-268).
H.R. 4755, a bill to designate the facility of the United
States Postal Service located at 204 South Broad Street in
Lancaster, Ohio, as the ``Clarence Miller Post Office
Building'' (Public Law 107-269).
H.R. 4794, a bill to designate the facility of the United
States Postal Service located at 1895 Avenida Del Oro in
Oceanside, California, as the ``Ronald C. Packard Post Office
Building'' (Public Law 107-270).
H.R. 4797/S. 2929, a bill to redesignate the facility of
the United States Postal Service located at 265 South Western
Avenue, Los Angeles, California, as the ``Nat King Cole Post
Office'' (Public Law 107-271).
H.R. 4851/S. 2828, a bill to redesignate the facility of
the United States Postal Service located at 6910 South Yorktown
Avenue in Tulsa, Oklahoma, as the ``Robert Wayne Jenkins
Station'' (Public Law 107-272).
S. 2900, a bill to designate the facility of the United
States Postal Service located at 6101 West Old Shakopee Road in
Bloomington, Minnesota, as the ``Thomas E. Burnett, Jr. Post
Office Building'' (Public Law 107-227).
H.R. 5308, a bill to designate the facility of the United
States Postal Service located at 301 South Howes Street in Fort
Collins, Colorado, as the ``Barney Apodaca Post Office''
(Public Law 107-283).
H.R. 5333, a bill to designate the facility of the United
States Postal Service located at 4 East Central Street in
Worcester, Massachusetts, as the ``Joseph D. Early Post Office
Building'' (Public Law 107-284).
H.R. 5336/S. 2918, a bill to designate the facility of the
United States Postal Service located at 380 Main Street in
Farmingdale, New York, as the ``Peter J. Ganci, Jr. Post Office
Building'' (Public Law 107-285).
H.R. 5340/S. 2931, a bill to designate the facility of the
United States Postal Service located at 5805 White Oak Avenue
in Encino, California, as the ``Francis Dayle `Chick' Hearn
Post Office'' (Public Law 107-286).
H.R. 5574, a bill to designate the facility of the United
States Postal Service located at 206 South Main Street in
Glennville, Georgia, as the ``Michael Lee Woodcock Post
Office'' (Public Law 107-291).
Measures Favorably Reported by Committee and Passed by the Senate
S. Res. 187--Resolution Commending the Capitol Hill Community for Their
Courage and Professionalism Following the Release of Anthrax
This Senate resolution commends the staffs of Members of
Congress, the Capitol Police, the Office of the Attending
Physician and his health care staff, and other members of the
Capitol Hill community for their courage, professionalism, and
dedication to serving the public in the aftermath of the
September 11, 2001, attacks and the release of anthrax in
Senator Daschle's office. The resolution was introduced by
Senator Cleland on December 5, 2001, and was referred to the
Committee. The resolution was ordered to be reported on March
21, 2002 by voice vote; it was reported on April 8, 2002
without written report; and it was agreed to in the Senate by
unanimous consent on April 10, 2002.
H. Con. Res. 339--Resolution Expressing the Sense of the Congress
Regarding the Bureau of the Census on the 100th Anniversary of
its Establishment
This resolution recognizes the 100th anniversary of the
establishment of the Bureau of the Census, and acknowledges the
achievements and contributions of the Bureau of the Census, and
of its current and former employees, to the United States. The
resolution was introduced by Representative Dan Miller and was
agreed to in the House on March 12, 2002, whereupon it was
received in the Senate and referred to the Committee. The
resolution was ordered to be reported by the Committee on March
21, 2002 by voice vote, and it was reported the same day
without written report. It was agreed to in the Senate on March
22, 2002.
S. 1144--To Reauthorize the Federal Emergency Management Food and
Shelter Program
This bill would reauthorize funding for the Emergency Food
and Shelter (EFS) program for Fiscal Years 2002 through 2004.
The bill authorized increased funding over current levels. The
EFS program provides emergency assistance to supplement
community efforts to meet food, shelter, and other related
needs of homeless and hungry persons in all fifty States and
the District of Columbia. Most of the money is allocated by
local boards composed of representatives from religious and
charitable organizations, which recommend non-profit and local
government agencies to be funded. The money is spent on food or
shelter, or on emergency one-month assistance with rent,
mortgage, and utility payments. Administrative overhead is kept
to an unusually low amount, less than 3 percent.
S. 1144 was introduced by Chairman Lieberman on June 29,
2001, and was co-sponsored by Senators Collins, Levin, Akaka,
Durbin, and Cleland. The bill was ordered to be reported by the
Committee on August 2, 2001 by voice vote, was reported the
same day without written report, and was approved by the Senate
on August 3, 2001 by unanimous consent.
S. 2936--To Temporarily Increase Annuity Computations During Periods of
Receiving Disability Payments
This legislation would address a longstanding inequity in
the way Federal employee pensions are determined for employees
insured on the job who then spend an extended time receiving
workers' compensation. During the time the employee is
receiving workers' compensation, no payments are made into the
employee's Thrift Savings Plan account or into Social Security.
If the employee returns to work and subsequently retires, the
employee is then at a distinct disadvantage. Under the bill, to
correct this situation, an employee who receives workers'
compensation for at least a year and then returns to work will,
upon retirement, receive a boost in annuity under the Federal
Employees Retirement System for the period when the employee
was receiving the workers' compensation.
S. 2936 was introduced by Senator Allen on September 13,
2002, on behalf of himself and Senators Warner and Clinton. The
bill was referred to the Committee, and further referred to the
Subcommittee on International Security, Proliferation and
Federal Services. The bill was polled out by the Subcommittee;
was ordered reported with an amendment by the Committee by roll
call vote of 9-0 on October 9, 2002; was reported from the
Committee on October 15, 2002; and was passed by the Senate by
unanimous consent on October 17, 2002. The bill was then
received in the House and referred to the House Committee on
Government Reform.
Postal Naming Bills
S. 1983, a bill to designate the facility of the United
States Postal Service located at 201 Main Street, Lake Placid,
New York, as the ``John A. `Jack' Shea Post Office Building.''
Selected Measures Considered by the Committee
S. 1008--The Climate Change Strategy and Technology Innovation Act of
2001
S. 1008 would have created an Office on Climate Change
within the White House, and would have required the office to
prepare a detailed strategy to stabilize the concentration of
greenhouse gasses in the atmosphere. The legislation also
sought to create a new office within the Department of Energy,
with new funding, to research and develop technologies to
combat climate change.
S. 1008 was introduced on June 8, 2001 by Senators Byrd and
Stevens, and referred to the Committee. The Committee held a
hearing on the legislation on July 18, 2001. On August 2, 2001,
the Committee ordered the bill to be reported, with two
amendments, by voice vote. The bill was reported on November
15, 2001 (S. Rept. 107-99). A similar version of the
legislation passed the Senate as part of omnibus energy
legislation (S. 517; Title X), but did not become law.
S. 1651--United States Consensus Council Act of 2002
S. 1651 would create the United States Consensus Council,
which would be established to provide for a consensus building
process in addressing national policy issues. Under the
legislation, which was introduced by Senator Dorgan on November
7, 2001, the Council, a nonprofit independent entity, would
provide professional mediation services in cooperation with
Congress to help resolve difficult policy issues by building
consensus agreements among stakeholders. On October 9, 2002,
the Committee ordered the bill to be reported with a substitute
amendment by a roll call vote of 9-0. The bill was reported on
October 15, 2001, and a written report was filed on November 4,
2002 (S. Rept. 107-330).
S. 1811--Presidential Appointments Improvement Act of 2002
Ranking Minority Member Thompson and Chairman Lieberman
introduced this legislation on December 12, 2001 with Senators
Durbin, Akaka, Voinovich, and Lugar as co-sponsors, following 2
days of hearings in April 2001 on ways to streamline the
financial disclosure process for Executive Branch nominees. The
bill would reduce the amount of financial information Executive
Branch nominees and high level employees would have to provide,
while retaining sufficient detail to determine conflicts of
interest. It would also strengthen the public's right to know
through a provision requiring a monthly, online list for easy
tracking of disclosures of waivers of conflict of interest
requirements.
The Committee unanimously reported the bill out on March
21, 2002 by voice vote, with an amendment that made several
technical changes. The bill was reported on May 16, 2002 (S.
Rept. 107-152).
S. 3054--No Taxation Without Representation Act of 2002
This bill would entitle D.C. residents to elect two
Senators and as many Members of the House of Representatives as
Washington, D.C. would be apportioned based on its population
if it were a State. (Under current apportionment standards,
D.C. would receive one Representative.) The bill also provides
that the permanent membership of the House of Representatives
would be increased by one to 436. Chairman Lieberman introduced
S. 3054 on October 3, 2002, and the bill was ordered to be
reported favorably without amendment on October 9, 2002 by a
roll call vote of 9-0. The bill was reported on October 10,
2002, and a written report was filed on November 15, 2002 (S.
Rept. 107-373).
H.R. 577--To require disclosure of sources and amounts of contributions
to presidential libraries
H.R. 577 would amend the Presidential Libraries Act of 1955
to make the fundraising process for presidential libraries open
to public scrutiny by requiring the disclosure of the sources
and amounts of certain donations made during and after a
President's term in office. The bill was ordered reported out
of the Committee without amendment on March 21, 2002, by voice
vote; it was reported on June 11, 2002 (S. Rept. 107-160).
VIII. Presidential Nominations
During the 107th Congress, the Committee received a total
of 50 Presidential nominations. Of the nominations, 24 were
favorably reported by the Committee and confirmed by the
Senate, 13 were discharged from Committee and confirmed, five
were withdrawn by the President, and eight were not acted upon
by the Committee.
The following 24 were favorably reported by the Committee
and confirmed by the Senate:
Joe M. Allbaugh, of Texas, to be Director of the Federal
Emergency Management Agency. (Hearing held on February 13,
2001)
Othoneil ``Tony'' Armendariz, of Texas, to be a Member
of the Federal Labor Relations Authority for a term expiring
July 1, 2005. (Hearing held June 21, 2001)
Dan Gregory Blair, of the District of Columbia, to be
Deputy Director of the Office of Personnel Management. (Hearing
held February 8, 2002)
James E. Boasberg, of the District of Columbia, to be an
Associate Judge of the Superior Court of the District of
Columbia for a term of fifteen years. (Hearing held June 26,
2002)
Michael D. Brown, of Colorado, to be Deputy Director of
the Federal Emergency Management Agency. (Hearing held June 19,
2002)
Erik Patrick Christian, of the District of Columbia, to
be an Associate Judge of the Superior Court of the District of
Columbia for a term of fifteen years. (Hearing held May 22,
2001)
Jeanette J. Clark, of the District of Columbia, to be an
Associate Judge of the Superior Court of the District of
Columbia for a term of fifteen years. (Hearing held March 5,
2002)
Todd Walther Dillard, of Maryland, to be United States
Marshal for the Superior Court of the District of Columbia,
Department of Justice, for a term of 4 years. (Hearing held May
16, 2002)
Nancy Dorn, of Texas, to be Deputy Director of the
Office of Management and Budget. (Hearing held February 8,
2002)
Mark W. Everson, of Texas, to be Controller, Office of
Federal Financial Management, Office of Management and Budget.
(Hearing held October 11, 2001)
Mark W. Everson, of Texas, to be Deputy Director for
Management, Office of Management and Budget. (Hearing held July
17, 2002)
Ruth Y. Goldway, of California, to be a Commissioner,
Postal Rate Commission for a term expiring November 22, 2008.
(Hearing held October 8, 2002)
John D. Graham, of Massachusetts, to be Administrator of
the Office of Information and Regulatory Affairs, Office of
Management and Budget. (Hearing held May 17, 2001)
Tony Hammond, of Virginia, to be a Commissioner, Postal
Rate Commission for the remainder of the term expiring October
14, 2004, to which position he was appointed during the last
recess of the Senate. (Hearing held October 8, 2002)
John L. Howard, of Illinois, to be Chairman of the
Special Panel on Appeals for a term of 6 years. (Hearing held
February 8, 2002)
Kay Coles James, of Virginia, to be Director of the
Office of Personnel Management. (Hearing held June 21, 2001)
Louis Kincannon, of Virginia, to be Director of the
Census Bureau, Department of Commerce. (Hearing held February
28, 2002)
Lynn Leibovitz, of the District of Columbia, to be an
Associate Judge of the Superior Court of the District of
Columbia for a term of fifteen years. (Hearing held July 26,
2001)
Stephen A. Perry, of Ohio, to be Administrator, General
Services Administration. (Hearing held May 17, 2001)
Paul A. Quander, of the District of Columbia, to be
Director of the District of Columbia Offender Supervision,
Defender, and Courts Services Agency for a term of 6 years.
(Hearing held April 11, 2002)
Robert R. Rigsby, of the District of Columbia, to be an
Associate Judge of the Superior Court of the District of
Columbia for a term of fifteen years. (Hearing held May 16,
2002)
Maurice A. Ross, of the District of Columbia, to be an
Associate Judge of the Superior Court of the District of
Columbia for a term of fifteen years. (Hearing held May 22,
2001)
Angela Styles, of Virginia, to be Administrator for
Federal Procurement Policy, Executive Office of the President.
(Hearing held May 17, 2001)
Odessa F. Vincent, of the District of Columbia, to be an
Associate Judge of the Superior Court of the District of
Columbia for a term of fifteen years. (Hearing held November 6,
2001)
There were 13 nominations in which the Committee was
discharged with the concurrence of the Committee and the
nominations confirmed by the Senate. Eight of these 13
nominations are for Inspectors General which, according to a
Standing Order of the Senate, are sequentially referred to the
Committee and the Committee is subsequently discharged after 20
days:
Robert Watson Cobb, of Maryland, to be Inspector
General, National Aeronautics and Space Administration.
Mitchell E. Daniels, Jr., of Indiana, to be Director of
the Office of Management and Budget. (Hearing held January 19,
2001)
Kenneth M. Donohue, Sr., of Virginia, to be Inspector
General, Department of Housing and Urban Development.
Clark Kent Ervin, of Texas, to be Inspector General,
Department of State.
Phyllis K. Fong, of Maryland, to be Inspector General,
Department of Agriculture.
J. Russell George, of Virginia, to be Inspector General,
Corporation for National and Community Service.
John Portman Higgins, of Virginia, to be Inspector
General, Department of Education.
Daniel R. Levinson, of Maryland, to be Inspector
General, General Services Administration.
Sean O'Keefe, of New York, to be Deputy Director of the
Office of Management and Budget. (Hearing held February 27,
2001)
Alejandro Modesto Sanchez, of Florida, to be a Member of
the Federal Retirement Thrift Investment Board for a term
expiring October 11, 2006. (Hearing held November 15, 2002)
Andrew M. Saul, of New York, to be Chairman of the
Federal Retirement Thrift Investment Board for a term expiring
September 25, 2004. (Hearing held November 15, 2002)
Joseph E. Schmitz, of Maryland, to be Inspector General,
Department of Defense.
Gordon J. Whiting, of New York, to be a Member of the
Federal Retirement Thrift Investment Board for a term expiring
September 25, 2006. (Hearing held November 15, 2002)
There were five nominations which were officially withdrawn
by the President:
James H. Atkins, of Arkansas, to be a Member of the
Federal Retirement Thrift Investment Board.
Sheryl R. Marshall, of Massachusetts, to be a Member of
the Federal Retirement Thrift Investment Board.
Stuart D. Rick, of Maryland, to be a Member of the Merit
Systems Protection Board.
Barbara J. Sapin, of Maryland, to be a Member of the
Merit Systems Protection Board.
Beth Susan Slavet, of Massachusetts, to be Chairman of
the Merit Systems Protection Board.
There were eight nominations not acted upon by the
Committee:
Dale Cabaniss, of Virginia, to be a Member of the
Federal Labor Relations Authority for a term of 5 years
expiring July 29, 2007.
Albert Casey, of Texas, to be a Governor of the United
States Postal Service for a term expiring December 8, 2009.
Peter Eide, of Maryland, to be General Counsel of the
Federal Labor Relations Authority for a term of 5 years.
Susanne T. Marshall, of Virginia, to be Chairman of the
Merit Systems Protection Board.
Neil McPhie, of Virginia, to be a Member of the Merit
Systems Protection Board for a term of 7 years expiring March
1, 2009.
James C. Miller, III, of Virginia, to be a Governor of
the United States Postal Service for a term expiring December
8, 2010.
Fern Flanagan Saddler, of the District of Columbia, to
be an Associate Judge of the Superior Court of the District of
Columbia for a term of fifteen years.
Linda M. Springer, of Virginia, to be Controller, Office
of Federal Financial Management, Office of Management and
Budget.
IX. ACTIVITIES OF THE SUBCOMMITTEES
INTERNATIONAL SECURITY, PROLIFERATION, AND FEDERAL SERVICES
SUBCOMMITTEE
Chairman: Thad Cochran
Ranking Minority Member: Daniel K. Akaka
I. Hearings
The Subcommittee on International Security, Proliferation,
and Federal Services held the following hearings during the
107th Congress:
FEMA's Role in Managing Bioterrorist Attacks and the Impact of Public
Health Concerns on Bioterrorism Preparedness (July 23, 2001).
The Office of National Preparedness was created in the
Federal Emergency Management Agency (FEMA) to implement a
national effort against terrorism. The Subcommittee held a
hearing to examine what role FEMA is taking in preparing
communities and States for a biological event. How is FEMA
ensuring that biological event issues are addressed and that
their preparedness efforts support and encourage those in the
Department of Health and Human Services? Is FEMA encouraging
programs and activities on the State and local level to improve
the public health infrastructure to both prepare and respond to
a bioterrorist attack, naturally occurring epidemic, or any
event that may cripple an area's health care system?
Witnesses: Bruce Baughman, Director, Planning and
Readiness, Federal Emergency Management Agency; Dr. Scott R.
Lillibridge, Special Assistant to the Secretary, Department of
Health and Human Services for National Security and Emergency
Management; Dr. Tara J. O'Toole, Johns Hopkins Center for
Civilian Biodefense Studies; and Dr. Dan Hanfling, FACEP,
Chairman, Disaster Preparedness Committee, Inova Fairfax
Hospital, Falls Church, Virginia.
S. 995--Whistleblower Protection Act Amendments (July 25, 2001).
The Subcommittee held a hearing to examine legislation to
amend the Whistleblower Protection Act (WPA) in order to
restore and strengthen the protections available to Federal
whistleblowers. The legislation seeks, among other things, to
correct recent decisions by the U.S. Court of Appeals for the
Federal Circuit which have limited the scope of the WPA. The
hearing examined the recent holdings of the Federal Circuit
which have excluded whistleblower protection for certain
disclosures despite the repeated statements of congressional
intent to protect ``any'' lawful disclosure. Witnesses
commented on the need to cover any lawful disclosure without
restriction to time, place, form, motive, or context, or prior
disclosure made to any person by an employee or applicant,
including a disclosure made in the ordinary course of an
employee's duties, that the employee or applicant reasonably
believes is credible evidence of any violation of any law,
rule, or regulation, or other misconduct.
Witnesses also testified on the need for independent
litigating authority for the Office of Special Counsel (OSC).
Currently, the OSC has no authority to request that the Merit
Systems Protection Board (MSPB) reconsider one of its decisions
or to seek review of an MSPB decision by the U.S. Court of
Appeals for the Federal Circuit. Even when another party with
authority to petition for a review of an MSPB decision does so,
OSC has historically been denied the right to participate in
those proceedings. In addition, when the OSC believes that MSPB
misinterprets one of the laws within OSC's jurisdiction, the
OSC has no right to appeal that decision, even if it was one of
the parties before the MSPB. Under current law, while the
Office of Personnel Management (OPM) can request that the MSPB
reconsider its rulings, OSC cannot. According to witnesses, the
limitation undermines both OSC's ability to protect
whistleblowers and the integrity of the whistleblower law.
Witnesses also testified on a provision in S. 995 which
codifies an anti-gag provision that has been passed annually
since 1988 as part of the appropriations process. The provision
states that employees should not be forced to sign disclosure
agreements or be subjected to nondisclosure rules or policies
that supercede an employee's rights under good government
statutes. It bans agencies from implementing or enforcing any
nondisclosure policy, form or agreement that does not contain
specified language preserving open government statutes such as
the WPA, the Military Whistleblower Protection Act, and the
Lloyd Lafollette Act, which prohibits discrimination against
government employees who communicate with Congress.
The hearing also covered other provisions of S. 995, as
well as additional reforms necessary to protect whistleblowers
such as overturning the ``irrefragable proof '' standard
implemented by the Federal Circuit for determining reasonable
belief in whistleblower cases and a loophole allowing
whistleblowers to be fired under the guise of losing their
security clearance.
Witnesses: Hon. Charles E. Grassley, U.S. Senator; Hon.
Elaine Kaplan, Special Counsel, Office of Special Counsel; Hon.
Beth S. Slavet, Chairman, U.S. Merit Systems Protection Board;
and Thomas Devine, Legal Director, Government Accountability
Project. And written statements of Stewart E. Schiffer, Acting
Attorney General, Civil Division, Department of Justice; and
Colleen M. Kelley, National President, National Treasury
Employees Union.
The Annual Report of the Postmaster General and the Impact of Terrorist
Attacks on Postal Operations (September 20, 2001).
In the aftermath of the domestic terrorist attacks on
September 11, 2001, the Subcommittee expanded its annual
hearing on the state of the U.S. Postal Service to learn what
steps the Service had taken to secure the mail and operations
of the Postal Service. The hearing noted that America's
recovery from the terrorist attacks requires a strong and
viable Postal Service. Delivery of the U.S. mail is a basic and
fundamental public service that must be protected from
disruption. The hearing also noted that the added costs
associated with ensuring the continuation of this reliable and
efficient service would have to be addressed, especially in
light of the continued drop in mail volume and revenue.
Witnesses: Hon. John E. Potter, Postmaster General and
Chief Executive Officer, U.S. Postal Service; Kenneth C.
Weaver, Chief Postal Inspector, U.S. Postal Service; and a
written statement from Karla W. Corcoran, Inspector General,
U.S. Postal Service.
Terrorism Through the Mail: Protecting Postal Workers and the Public,
Joint Hearings of the Governmental Affairs Committee and the
Subcommittee on International Security, Proliferation, and
Federal Services (October 30 and October 31, 2001).
Two days of hearings were held to learn whether adequate
steps were taken to protect postal workers and the public from
future terrorist attacks, especially from biological attacks
through the mail using agents such as anthrax. Of particular
interest was whether the Centers for Disease Control and the
Postal Service were aggressive enough in protecting postal
workers and the public.
Witnesses: Hon. John E. Potter, Postmaster General/CEO,
U.S. Postal Service, accompanied by Thomas Day, Vice President
of Engineering, Patrick Donahoe, Chief Operating Officer and
Executive Vice President, U.S. Postal Service, and Ken Weaver,
Chief Postal Inspector, U.S. Postal Inspection Service; William
Burrus, President-Elect, American Postal Workers Union (AFL-
CIO), accompanied by Denise Manley, Distribution Clerk,
Government Mail Section, Brentwood Mail Processing Facility;
Vincent R. Sombrotto, President, National Association of Letter
Carriers (NALC), accompanied by Tony DiStephano, Jr.,
President, NALC Branch 380, Trenton, New Jersey; William Quinn,
National President, National Postal Mail Handlers Union; and
Gus Baffa, President, National Rural Letter Carriers'
Association (NRLCA).
The Role of Bilateral and Multilateral Arms Control Agreements in
Controlling Threats From the Proliferation of Weapons of Mass
Destruction (Five days of hearings were combined under this
title with listed titles for the following dates:)
(1) Current and Future Weapons of Mass Destruction (WMD) Proliferation
Threats (November 7, 2001).
The Subcommittee held a hearing to explore sources of
chemical, biological, and nuclear threats and to examine how
export controls may be best employed to curb weapons of mass
destruction (WMD) proliferation. The widened means to acquire
WMD has affected the utility of export controls. Global
commercial networks enable nations to simply buy these
materials and technologies instead of developing them
indigenously. The utility of export controls will depend on how
multilateral export control policies are pursued and
implemented by partner nations. Witnesses reviewed the present
and future weapons of mass destruction threats of greatest
concern, the dual use technologies used to develop WMD, the
most effective export control mechanisms to curb WMD
proliferation, and whether a new export control process or
agency was needed.
Witnesses: Dr. Michael L. Moodie, President, Chemical and
Biological Arms Control Institute; Dr. Jonathan B. Tucker,
Director, Chemical and Biological Nonproliferation Program,
Center for Nonproliferation Studies, Monterey Institute of
International Studies; Rose Gottemoeller, Senior Associate,
Carnegie Endowment for International Peace; Joseph A.
Christoff, Director, International Affairs and Trade, U.S.
General Accounting Office; Dr. Richard Cupitt, Associate
Director, Center for International Trade and Security; Dr.
James A. Lewis, Senior Fellow and Director of Technology
Policy, Center for Strategic and International Studies; and Dr.
Gary Milhollin, Director, Wisconsin Project on Nuclear Arms
Control.
(2) Combating Proliferation of Weapons of Mass Destruction (WMD) with
Non-Proliferation Programs: Non-Proliferation Assistance
Coordination Act of 2001, Part I (November 14, 2001).
The collapse of the Soviet Union left stockpiles of nuclear
weapons, materials, facilities, and technology vulnerable to
theft and diversion to terrorist networks and rogue states.
Congress established an array of threat reduction programs to
assist in dismantling former Soviet weapons of mass destruction
and improve the security of such weapons, materials and human
expertise. The Subcommittee held a hearing to review the Non-
Proliferation Assistance Coordination Act of 2001 within the
broader context of what role non-proliferation programs should
have in a comprehensive non-proliferation strategy. In the
first part of this hearing, outside witnesses examined current
non-proliferation programs in the Former Soviet Union and
addressed the following questions: (1) How would the
establishment of an interagency committee, such as advocated by
the Non-Proliferation Assistance Coordination Act, make these
programs more effective? (2) How would public and private
sector efforts be harmonized? and (3) Are there new programs
that should be considered?
Witnesses: Hon. Chuck Hagel, U.S. Senator; Gary L. Jones
(Ms.), Director of Nuclear and Nonproliferation Issues, General
Accounting Office Division of Natural Resources and
Environment; Dr. Laura S.H. Holgate, Vice President for Russia/
Newly Independent States Programs, Nuclear Threat Initiative;
and Leonard S. Spector, Deputy Director, Center for
Nonproliferation Studies, Monterey Institute of International
Studies.
(3) Combating Proliferation of Weapons of Mass Destruction (WMD) with
Non-Proliferation Programs: The Non-Proliferation Assistance
Coordination Act of 2001, Part II (November 29, 2001).
The Subcommittee held a hearing to consider administration
views of the Non-Proliferation Assistance Coordination Act of
2001 within the broader context of what role non-proliferation
programs should have in a comprehensive national non-
proliferation strategy. Part II included representatives from
the Departments of Energy, Defense, State, and Commerce to
discuss their current programs, coordination efforts, and the
impact of their efforts from the Bush-Putin Summit. The hearing
examined current non-proliferation programs in the former
Soviet Union.
Witnesses: Vann H. Van Diepen, Acting Deputy Assistant
Secretary of State, Bureau of Non-proliferation, U.S.
Department of State; Marshall S. Billingslea, Acting Deputy
Assistant Secretary of Defense for Negotiation Policy, U.S.
Department of Defense; Kenneth E. Baker, Principal Assistant
Deputy Administrator for Defense Nuclear Nonproliferation,
National Nuclear Security Administration, U.S. Department of
Energy; and Matthew S. Borman, Deputy Assistant Secretary,
Bureau of Export Administration, U.S. Department of Commerce.
(4) Multilateral Non-Proliferation Regimes, Weapons of Mass Destruction
Technologies, and the War on Terrorism (February 12, 2002).
The Subcommittee held a hearing to assess U.S. relations
with multilateral non-proliferation regimes and provide
recommendations for how such regimes may be best incorporated
into the war on terrorism and for preventing the spread of
weapons of mass destruction (WMD). The hearing reviewed the
effectiveness of five regimes: The Biological Weapons
Convention (BWC), the Chemical Weapons Convention (CWC), the
Non-Proliferation Treaty (NPT), the International Atomic Energy
Agency (IAEA), and the Missile Technology Control Regime
(MTCR). Witnesses addressed the following questions: (1) How
can multilateral regimes best support the current war on
terrorism? (2) How can verification be made more effective? (3)
How do technology controls contribute to regime effectiveness?
and (4) How can the treaties best address non-state actors and
terrorist groups?
Witnesses: Elisa D. Harris, Research Fellow, Center for
International and Security Studies; Dr. Amy E. Smithson, Ph.D.,
Director, Chemical and Biological Weapons Nonproliferation
Project, Henry L. Stimson Center; Dr. Jim Walsh, Research
Fellow, Belfer Center for Science and International Affairs,
John F. Kennedy School of Government, Harvard University; and
Dennis M. Gormley, Senior Fellow, International Institute for
Strategic Studies.
(5) Strengthening Multilateral Non-Proliferation Regimes (July 29,
2002).
The threat of weapons of mass destruction (WMD) terrorism
magnifies the significance of sound multilateral policies to
U.S. national security. The Subcommittee held a hearing to
examine multilateral arms control regimes within the context of
global WMD terrorism from state and non-state actors.
Administration witnesses addressed the effectiveness of current
non-proliferation regimes in preventing or delaying
proliferation of WMD, the relevance of non-proliferation
arrangements and organizations to preventing terrorists and
other non-state actors from acquiring WMD, the steps the United
States is taking to increase these regimes' effectiveness, and
emerging technological threats that these regimes are not
handling or are not equipped to handle. The hearing covered the
following regimes and international organizations: The
Australia Group, the Biological Weapons Convention, the
Chemical Weapons Convention, the Non-Proliferation Treaty, the
International Atomic Energy Agency, the Wassanaar Arrangement,
the Zangger Committee, and the Missile Technology Control
Regime.
Witnesses: Vann H. Van Diepen, Director, Office of
Chemical, Biological and Missile Nonproliferation, U.S.
Department of State, and Marshall S. Billingslea, Deputy
Assistant Secretary of Defense, U.S. Department of Defense.
United States Policy in Iraq: Next Steps (March 1, 2002).
The Subcommittee held a hearing to identify the weapons of
mass destruction (WMD) threat posed by Iraq and examine
different policies to address U.S. national security concerns.
Prior to the 1991 Persian Gulf War, Iraq was identified as a
significant national security threat within U.S. foreign policy
and the national security establishment. Since the end of the
Persian Gulf War and the broader consciousness of WMD
terrorism, Iraq has endured as a national security concern.
As of the date of the hearing, many differed on what form
U.S. policies should take in Iraq. Some believed Iraq was the
most immediate threat to national security and swift military
intervention and regime change should take the first priority.
Others stressed that U.S. policy must include strong
international support and not threaten broader multilateral
efforts against international terrorism. Witnesses discussed
the potential consequences of these policy options to the
broader efforts against terrorism and international national
security and addressed how policies can be formulated to ensure
they do not create broader national security problems than
those they intend to eliminate.
Witnesses: Robert J. Einhorn, Senior Adviser, International
Studies Program, Center for Strategic and International
Studies; Dr. David A. Kay, Vice President, Science Applications
International Corporation; and Dr. Richard O. Spertzel, former
head of UN Special Commission (UNSCOM) Biological Weapon
Inspections and former Deputy Commander, U.S. Army Medical
Research Institute of Infectious Disease (USAMRIID).
CIA National Intelligence Estimate of Foreign Missile Developments and
the Ballistic Missile Threat through 2015 (March 11, 2002).
The Subcommittee held its annual hearing to review the
Central Intelligence Agency's (CIA) fourth National
Intelligence Estimate (NIE) of foreign missile developments and
ballistic missile threats. The NIE is the compilation of the
Intelligence Community's latest intelligence on ballistic
missile developments and threats and a discussion of threats
from nonmissile delivery options for weapons of mass
destruction. The NIE describes projections of likely missile
threats, assessments of theater ballistic missile threats
worldwide, the evolving proliferation environment and
importance of foreign assistance to developing missile
programs, and summary of forward-based threats and cruise
missiles.
Witness: Robert Walpole, National Intelligence Officer for
Strategic and Nuclear Programs, National Intelligence Council,
CIA.
Critical Skills for National Security and the Homeland Security Federal
Workforce Act--S. 1800 (March 12, 2002).
The Subcommittee held a hearing to review the need for more
people with critical skills in math, science, and foreign
languages in the Federal Government and to examine ways S.
1800, the Homeland Security Federal Workforce Act, would
strengthen the recruitment and retention of Federal employees
through student loan repayment, national security fellowship
programs, and management reforms. Witnesses addressed the broad
national security implications of shortages of Federal workers
with specific skills in math, science, and foreign languages.
Witnesses examined the critical skills needed in government and
responded to the following questions: (1) How can the
provisions in S. 1800 strengthen math, science, and foreign
language skills in government? (2) How has the national
security environment affected the need for these skills? and
(3) How could S. 1800 complement existing recruitment and
retention efforts in the Federal Government?
Witnesses: Donald J. Winstead, Assistant Director,
Compensation Administration, Office of Personnel Management
(OPM); Sheri A. Farrar, Assistant Director, Administrative
Services Division, Federal Bureau of Investigation (FBI),
accompanied by Margaret R. Gulotta, Chief of the Language
Services Unit, and Leah Meisel, Deputy Assistant Director and
Personnel Officer, Federal Bureau of Investigation; Ruth A.
Whiteside, Principal Deputy Assistant Secretary, Bureau of
Human Resources, Department of State (DOS); Ginger Groeber,
Acting Deputy Assistant Secretary, Civilian Personnel Policy,
Department of Defense (DOD); Harvey A. Davis, Associate
Director, Human Resource Services, National Security Agency
(NSA); Hon. Lee H. Hamilton, Director of the Woodrow Wilson
Center for International Scholars; Dr. Susan S. Westin,
Managing Director for International Affairs and Trade Issues,
General Accounting Office (GAO); and Dr. Ray T. Clifford,
Chancellor, Defense Language Institute.
The Federal Workforce: Legislative Proposals for Change (March 18 and
19, 2002).
The Subcommittee held two days of hearings on legislative
proposals that addressed how to achieve a strong Federal civil
service workforce. The hearings focused on current and future
workforce challenges in recruiting, hiring, training, and
retention. Questions were raised as to whether agencies have
sufficient personnel funding needed to attract, retain, train,
and motivate employees. Federal retirements and stiff
competition for new talent magnify this challenge. Witnesses
evaluated legislative proposals for their suitability to
strengthen the Federal Government as an employer of choice and
addressed the following questions: (1) What are the most
critical funding requirements to address the government's
workforce needs? (2) How can legislative proposals improve the
civil service while preserving the rights of the Federal
workforce? (3) How can existing and new managerial
flexibilities be made effective and fair to Federal workers?
(4) What additional resources and training do Federal agencies
require to make existing managerial flexibilities effective?
(5) How can recruitment, retention, compensation, and
management challenges be reconciled with personnel ceiling
limitations and contracting out quotas?
Witnesses: First day: Hon. Kay Coles James, Director,
Office of Personnel Management (OPM); Hon. David M. Walker,
Comptroller General, General Accounting Office (GAO); Colleen
M. Kelley, National President, National Treasury Employees
Union (NTEU); Bobby L. Harnage, Sr., National President,
American Federation of Government Employees (AFGE) (AFL-CIO);
G. Jerry Shaw, General Counsel, Senior Executives Association
(SEA); and John C. Priolo, General Executive Board Member,
Federal Managers Association (FMA).
Second day: Dr. Paul C. Light, Senior Advisor, National
Commission on the Public Service, Vice President and Director
of Government Studies, The Brookings Institution; Dr. Carolyn
Ban, Dean, Graduate School of Public and International Affairs,
University of Pittsburgh and President, National Association of
Schools of Public Affairs and Administration; Max Stier,
President, Partnership for Public Service; and Dr. Steven J.
Kelman, Professor of Public Management, John F. Kennedy School
of Government, Harvard University.
The Postal Service in the 21st Century: The USPS Transformation Plan
(May 13, 2002).
The Subcommittee held a hearing that reviewed the U.S.
Postal Service's Transformation Plan and a GAO report on the
financial condition of the Postal Service. Both the
Transformation Plan, which was released on April 4, 2002, and
the GAO assessment, were prepared at the request of the
Subcommittee and the Committee on Governmental Affairs. This
Subcommittee has long been concerned with the long-term
structural, financial, and operational challenges facing the
Postal Service, which is the linchpin to the nation's $900
billion domestic mailing industry employing nine million
workers. This hearing built on previous hearings that focused
on the accountability and transparency of postal finances and
operations.
Witnesses: Hon. John E. Potter, Postmaster General, U.S.
Postal Service, and Hon. David M. Walker, Comptroller General,
General Accounting Office (GAO).
Russia and China: Non-Proliferation Concerns and Export Controls (June
6, 2002).
The Subcommittee held a hearing to identify recent
proliferation activity from Russia and China and the methods
they use to enact export controls per international agreements.
This hearing, one in a series of hearings on non-proliferation,
addressed the supply-side of weapons of mass destruction and
missile proliferation and concentrated on the two biggest
exporters: Russia and China. Concerns have been raised
regarding the extent to which Russia and China, with their
highly developed nuclear, chemical, biological and missile
industries, comply with non-proliferation agreements and
enforce export controls.
Hearing witnesses were asked to address the following
issues: (1) What are the recent proliferation concerns from
Russia and China? (2) Have Russia and China complied with
multilateral export control agreements and enforced domestic
regulations? (3) Are failures the result of an ineffective
export control administration, a lack of resources, or a lack
of interest by the government in compliance? (4) What
assistance has or is the United States providing these
countries to assist them in developing effective export control
policies?
Witnesses: John S. Wolf, Assistant Secretary, Bureau of
Nonproliferation, U.S. Department of State; Matthew S. Borman,
Deputy Administrator, Bureau of Industry and Security, U.S.
Department of Commerce; Leonard S. Spector, Deputy Director,
Center for Nonproliferation, Monterey Institute for
International Studies; David Albright, President, Institute for
Science and International Security; and Gary Milholin,
Director, Wisconsin Project on Nuclear Arms Control.
Cruise Missile and UAV Threats to the United States (June 11, 2002).
The Subcommittee held a hearing to examine the extent of
cruise missile proliferation, the threat cruise missiles pose
to American forward deployed forces and U.S. territory,
difficulties faced in stemming the spread of cruise missile
systems and technology, and the ability of the Missile
Technology Control Regime (MTCR) to control cruise missiles and
unmanned aerial vehicles. The National Intelligence Estimate on
Foreign Missile Developments predicts that one to two dozen
countries will possess a land-attack cruise missile capability
by 2015 through indigenous development, acquisition, or
modification of other systems, such as unmanned aerial
vehicles. MTCR is the international regime set up to stem the
spread of cruise missiles. However, member nations focus almost
entirely on ballistic missiles and do not have standard ground
rules on cruise missile performance. Hearing witnesses were
asked to address the following questions: (1) How aggressively
are nations pursuing cruise missile purchases as complete
systems and developing indigenous capabilities? (2) What MTCR
provisions address cruise missile proliferation? What
challenges do the link between cruise missiles and the aircraft
industry pose to the MTCR's effectiveness? (3) How do unmanned
aerial vehicles complicate cruise missile controls? (4) What
measures other than the MTCR are being taken currently to stem
cruise missile proliferation? and (5) What is the current
status of efforts to improve the effectiveness of the MTCR?
Witnesses: Vann H. Van Diepen, Acting Deputy Assistant
Secretary, Bureau of Nonproliferation, U.S. Department of
State; Christopher Bolkcom, Analyst in National Defense,
Foreign Affairs, Defense and Trade Division, Congressional
Research Service; and Dennis Gormley, Senior Fellow,
International Institute for Strategic Studies.
The Annual Report of the Postmaster General (September 27, 2002).
The Subcommittee held its annual hearing to receive the
Postmaster General's report to the Senate on the state of the
U.S. Postal Service. The hearing also continued the
Subcommittee's oversight of the Postal Service's Transformation
Plan requested by the Subcommittee and Committee on
Governmental Affairs.
Witness: Hon. John E. Potter, Postmaster General, U.S.
Postal Service.
II. Legislation
The following is a list of the measures that were
considered by the Subcommittee on International Security,
Proliferation, and Federal Services and became public law:
S. 201, the Federal Employee Protection Act, a bill to
require that Federal agencies be accountable for violations of
antidiscrimination and whistleblower protection laws, and for
other purposes (As H.R. 169, Public Law 107-174).
S. 271, a bill to amend title 5, United States Code, to
provide that the mandatory separation age for Federal
firefighters be made the same as the age that applies with
respect to Federal law enforcement officers (As H.R. 93, Public
Law 107-27).
S. 529, a bill to provide wage parity for certain
Department of Defense prevailing rate employees in Georgia
(Incorporated in H.R. 3338, Public Law 107-117).
S. 1080, a bill to provide that employees who retire as
registered nurses under the Federal Employees Retirement System
shall have unused sick leave used in the computation of
annuities (Incorporated in H.R. 3447, Public Law 107-135).
S. 1256, a bill to reauthorize the Breast Cancer Research
Postage Stamp (Incorporated in H.R. 2590, Public Law 107-67).
S. 1286, a bill to authorize executive agencies to use
appropriated funds for salaries and expenses to provide child
care in Federal or leased facilities, or through contracts, for
civilian employees. The bill requires amounts used to be
applied to improve the affordability of child care for lower
income employees (Incorporated in H.R. 2590, Public Law 107-
67).
S. 1369 and S. 1498, bills to provide that Federal
employees, members of the foreign service, members of the
uniformed services, family members and dependents of such
employees and members, may retain for personal use promotional
items received as a result of official government travel
(Incorporated in H.R. 3338, Public Law 107-117).
S. 1713, a bill to amend title 39, USC, to direct the
Postal Service to adhere to an equitable tender policy in
selecting air carriers of non-priority bypass mail to certain
points in Alaska (Incorporated in H.R. 4775, Public Law 107-
206).
S. 1822, a bill to allow the Thrift Savings Plan to offer
certain catch up contributions for beneficiaries age 50 and
over, as provided by the Internal Revenue Code. (As H.R. 3340,
Public Law 107-304).
S. 2527, a bill to allow certain employees and annuitants
of the Overseas Private Investment Corporation to transfer to
the Federal Employee Health Benefits program (As H.R. 3340,
Public Law 107-304).
S. 3070, a bill authorizing appropriations for the Merit
Systems Protection Board and the Office of Special Counsel
(reauthorization provisions included in H.R. 3340, Public Law
107-304).
H.R. 2559, a bill to amend chapter 90 of title 5, USC, to
make technical corrections to the Federal long-term care
insurance program (Public Law 107-104).
In addition, the following measure was favorably reported
by the Subcommittee and passed by the Senate:
S. 2936, a bill to amend chapter 84 of title 5, United
States Code, to provide that certain Federal annuity
computations are adjusted by 1 percentage point relating to
periods of receiving disability payments.
Post Office Naming Bills
Measures Favorably Reported by Subcommittee and Enacted Into Law
H.R.132, a bill to designate the facility of the United
States Postal Service located at 620 Jacaranda Street in Lanai
City, Hawaii, as the ``Goro Hokama Post Office Building''
(Public Law 107-6).
H.R. 364, a bill to designate the facility of the United
States Postal Service located at 5927 Southwest 70th Street in
Miami, Florida, as the ``Marjory Williams Scrivens Post
Office'' (Public Law 107-29).
H.R. 395, a bill to designate the facility of the United
States Postal Service located at 2305 Minton Road in West
Melbourne, Florida, as the ``Ronald W. Reagan Post Office of
West Melbourne, Florida'' (Public Law 107-7).
H.R. 669, a bill to designate the facility of the United
States Postal Service located at 127 Social Street in
Woonsocket, Rhode Island, as the ``Alphonse F. Auclair Post
Office Building'' (Public Law 107-261).
H.R. 670, a bill to designate the facility of the United
States Postal Service located at 7 Commercial Street in
Newport, Rhode Island, as the ``Bruce F. Cotta Post Office
Building'' (Public Law 107-262).
H.R. 821, a bill to designate the facility of the United
States Postal Service located at 1030 South Church Street in
Asheboro, North Carolina, as the ``W. Joe Trogdon Post Office
Building'' (Public Law 107-32).
H.R. 1374, a bill to designate the facility of the United
States Postal Service located at 600 Calumet Street in Lake
Linden, Michigan, as the ``Philip E. Ruppe Post Office
Building'' (Public Law 107-191).
H.R. 1432, a bill to designate the facility of the United
States Postal Service located at 3698 Inner Perimeter Road in
Valdosta, Georgia, as the ``Major Lyn McIntosh Post Office
Building'' (Public Law 107-160).
H.R. 1748, a bill to designate the facility of the United
States Postal Service located at 805 Glen Burnie Road in
Richmond, Virginia, as the ``Tom Bliley Post Office Building''
(Public Law 107-161).
H.R. 1749, a bill to designate the facility of the United
States Postal Service located at 685 Turnberry Road in Newport
News, Virginia, as the ``Herbert H. Bateman Post Office
Building'' (Public Law 107-162).
H.R. 1753, a bill to designate the facility of the United
States Postal Service located at 419 Rutherford Avenue, N.E.,
in Roanoke, Virginia, as the ``M. Caldwell Butler Post Office
Building'' (Public Law 107-35).
H.R. 1761, a bill to designate the facility of the United
States Postal Service located at 8588 Richmond Highway in
Alexandria, Virginia, as the ``Herb Harris Post Office
Building'' (Public Law 107-92).
H.R. 1766, a bill to designate the facility of the United
States Postal Service located at 4270 John Marr Drive in
Annandale, Virginia, as the ``Stan Parris Post Office
Building'' (Public Law 107-85).
H.R. 2577, a bill to designate the facility of the United
States Postal Service located at 310 South State Street in St.
Ignace, Michigan, as the ``Bob Davis Post Office Building''
(Public Law 107-163).
H.R. 2876, a bill to designate the facility of the United
States Postal Service located in Harlem, Montana, as the
``Francis Bardanouve United States Post Office Building''
(Public Law 107-164).
H.R. 2910, a bill to designate the facility of the United
States Postal Service located at 3131 South Crater Road in
Petersburg, Virginia, as the ``Norman Sisisky Post Office
Building'' (Public Law 107-165).
H.R. 3072, a bill to designate the facility of the United
States Postal Service located at 125 Main Street in Forest
City, North Carolina, as the ``Vernon Tarlton Post Office
Building'' (Public Law 107-166).
H.R. 3248, a bill to designate the facility of the United
States Postal Service located at 65 North Main Street in
Cranbury, New Jersey, as the ``Todd Beamer Post Office
Building'' (Public Law 107-129).
H.R. 3287, a bill to redesignate the facility of the United
States Postal Service located at 900 Brentwood Road, NE, in
Washington, D.C., as the ``Joseph Curseen, Jr. and Thomas
Morris, Jr. Processing and Distribution Center'' (Public Law
107-225).
H.R. 3379, a bill to designate the facility of the United
States Postal Service located at 375 Carlls Path in Deer Park,
New York, as the ``Raymond M. Downey Post Office Building''
(Public Law 107-167).
H.R. 3738, a bill to designate the facility of the United
States Postal Service located at 1299 North 7th Street in
Philadelphia, Pennsylvania, as the ``Herbert Arlene Post Office
Building'' (Public Law 107-264).
H.R. 3739, a bill to designate the facility of the United
States Postal Service located at 6150 North Broad Street in
Philadelphia, Pennsylvania, as the ``Rev. Leon Sullivan Post
Office Building'' (Public Law 107-265).
H.R. 3740, a bill to designate the facility of the United
States Postal Service located at 925 Dickinson Street in
Philadelphia, Pennsylvania, as the ``William A. Cibotti Post
Office Building'' (Public Law 107-266).
H.R. 3960, a bill to designate the facility of the United
States Postal Service located at 3719 Highway 4 in Jay,
Florida, as the ``Joseph W. Westmoreland Post Office Building''
(Public Law 107-193).
H.R. 4717, a bill to designate the facility of the United
States Postal Service located at 1199 Pasadena Boulevard in
Pasadena, Texas, as the ``Jim Fonteno Post Office Building''
(Public Law 107-268).
H.R. 4755, a bill to designate the facility of the United
States Postal Service located at 204 South Broad Street in
Lancaster, Ohio, as the ``Clarence Miller Post Office
Building'' (Public Law 107-269).
H.R. 4794, a bill to designate the facility of the United
States Postal Service located at 1895 Avenida Del Oro in
Oceanside, California, as the ``Ronald C. Packard Post Office
Building'' (Public Law 107-270).
H.R. 5207, a bill to designate the facility of the United
States Postal Service located at 6101 West Old Shakopee Road in
Bloomington, Minnesota, as the ``Thomas E. Burnett, Jr. Post
Office Building'' (Public Law 107-227).
H.R. 5308, a bill to designate the facility of the United
States Postal Service located at 301 South Howes Street in Fort
Collins, Colorado, as the ``Barney Apodaca Post Office''
(Public Law 107-283).
H.R. 5333, a bill to designate the facility of the United
States Postal Service located at 4 East Central Street in
Worcester, Massachusetts, as the ``Joseph D. Early Post Office
Building'' (Public Law 107-284).
H.R. 5574, a bill to designate the facility of the United
States Postal Service located at 206 South Main Street in
Glennville, Georgia, as the ``Michael Lee Woodcock Post
Office'' (Public Law 107-291).
S. 737, a bill to designate the facility of the United
States Postal Service located at 811 South Main Street in
Yerington, Nevada, as the ``Joseph E. Dini, Jr. Post Office''
(Public Law 107-144).
S. 970, a bill to designate the facility of the United
States Postal Service located at 39 Tremont Street, Paris Hill,
Maine, as the ``Horatio King Post Office Building'' (Public Law
107-145).
S. 985, a bill to designate the facility of the United
States Postal Service located at 113 South Main Street in
Sylvania, Georgia, as the ``G. Elliot Hagan Post Office
Building'' (as H.R. 1183, Public Law 107-34).
S. 1026, a bill to designate the United States Post Office
located at 60 Third Avenue in Long Branch, New Jersey, as the
``Pat King Post Office Building.'' (as H.R. 2997, Public Law
107-146).
S. 1181, a bill to designate the facility of the United
States Postal Service located at 2719 South Webster Street in
Kokomo, Indiana, as the ``Elwood Haynes `Bud' Hillis Post
Office Building'' (as H.R. 2043, Public Law 107-36).
S. 1184, a bill to designate the facility of the United
States Postal Service located at 2853 Candler Road in Decatur,
Georgia, as the ``Earl T. Shinhoster Post Office'' (as H.R.
2261, Public Law 107-86).
S. 1222, a bill to redesignate the facility of the United
States Postal Service located at 89 River Street in Hoboken,
New Jersey, as the ``Frank Sinatra Post Office Building'' (as
H.R. 3034, Public Law 107-263).
S. 1381, a bill to redesignate the facility of the United
States Postal Service located at 5472 Crenshaw Boulevard in Los
Angeles, California, as the ``Congressman Julian C. Dixon Post
Office'' (as H.R. 2454, Public Law 107-88).
S. 1970, a bill to designate the facility of the United
States Postal Service located at 2829 Commercial Way in Rock
Springs, Wyoming, as the ``Teno Roncalio Post Office Building''
(as H.R. 3789, Public Law 107-192).
S. 2217, a bill to designate the facility of the United
States Postal Service located at 3101 West Sunflower Avenue in
Santa Anna, California, as the ``Hector G. Godinez Post Office
Building'' (as H.R. 1366, Public Law 107-190).
S. 2433, a bill to designate the facility of the United
States Postal Service located at 1590 East Joyce Boulevard in
Fayetteville, Arkansas, as the ``Clarence B. Craft Post Office
Building'' (as H.R. 4486, Public Law 107-194).
S. 2828, a bill to redesignate the facility of the United
States Postal Service located at 6910 South Yorktown Avenue in
Tulsa, Oklahoma, as the ``Robert Wayne Jenkins Station'' (as
H.R. 4851, Public Law 107-272).
S. 2840, a bill to designate the facility of the United
States Postal Service located at 120 North Maine Street in
Fallon, Nevada, as the ``Rollan D. Melton Post Office
Building'' (as H.R. 4102, Public Law 107-267).
S. 2918, a bill to designate the facility of the United
States Postal Service located at 380 Main Street in
Farmingdale, New York, as the ``Peter J. Ganci, Jr. Post Office
Building'' (as H.R. 5336, Public Law 107-285).
S. 2929, a bill to redesignate the facility of the United
States Postal Service located at 265 South Western Avenue, Los
Angeles, California, as the ``Nat King Cole Post Office'' (as
H.R. 4797, Public Law 107-271).
S. 2931, a bill to designate the facility of the United
States Postal Service located at 5805 White Oak Avenue in
Encino, California, as the ``Francis Dayle `Chick' Hearn Post
Office'' (as H.R. 5340, Public Law 107-286).
Measures Favorably Reported by Subcommittee and Passed by the Senate
S. 1983, a bill to designate the facility of the United
States Postal Service located at 201 Main Street, Lake Placid,
New York, as the ``John A. `Jack' Shea Post Office Building.''
III. REPORT AND GAO REPORTS
1. Assessment of Remote Sensing Data Use by Civilian
Federal Agencies. In December 2001, Subcommittee Chairman
Daniel K. Akaka released a study prepared by Subcommittee staff
that examined the responses of 20 agencies which participated
in a Subcommittee-requested Congressional Research Service
questionnaire assessing the use of remote sensing--observation
of areas of land and water by airplane or satellite--by Federal
non-military agencies.
2. The following reports were issued or requested by the
General Accounting Office (GAO) at the request of the Chairman
and/or Ranking Member of the Subcommittee on International
Security, Proliferation, and Federal Services:
Human Capital: The Role of Ombudsmen in Dispute
Resolution, GAO-01-446 (April 2001).
Managing for Results: Human Capital Management
Discussions in Fiscal Year 2001 Performance Plans, GAO-01-236
(April 2001).
U.S. Postal Service: Information on Retirement Plans,
GAO-02-170 (December 2001).
U.S. Postal Service: Deteriorating Financial Outlook
Increases Need for Transformation, GAO-02-355 (February 2002).
Results-Oriented Cultures, Insights for U.S. Agencies
from Other Countries' Performance Management Initiatives, GAO-
02-862 (August 2002).
Hazard Mitigation: Proposed Changes to FEMA's
Multihazard Mitigation Programs Present Challenges, GAO-02-1035
(September 2002).
U.S. Postal Service: Opportunities to Strengthen
Information Technology Investment Management Capabilities, GAO-
03-3 (October 2002).
Use of Human Capital Flexibilities in Selected Federal
Agencies GAO-03-02 (December 2002)
Federal Employees' Health Plans: Premium Growth and
OPM's Role in Negotiating
Benefits, GAO-03-236 (December 2002).
U.S. Postal Facilities Physical Security, (Expected
completion March 12, 2004).
Effective Workforce Planning Practices in Federal
Agencies, (Expected completion December 15, 2003).
Ballistic Missile Defense Technology Readiness Levels,
(GAO-03-600, August 2003).
Security of Russian Weapons of Mass Destruction, (GAO-
03-482, March 2003).
Nonproliferation of Radioactive Sources Abroad, (GAO-03-
638, May 2003).
Domestic Efforts to Strengthen Controls over
Radiological Sources, (GAO-03-483, April 2003).
Review of the Implementation of the Revised Statistical
Policy Directive Number 15, Race and Ethnicity Standards for
Federal Statistical Agencies and Administrative Reporting.
OVERSIGHT OF GOVERNMENT MANAGEMENT,
RESTRUCTURING AND THE DISTRICT OF COLUMBIA
SUBCOMMITTEE
Chairman: George V. Voinovich
Ranking Minority Member: Richard J. Durbin
I. Hearings
The Subcommittee on Oversight of Government Management,
Restructuring and the District of Columbia held the following
hearings during the 107th Congress, the first four of which
were conducted under the chairmanship of Senator George V.
Voinovich:
1. High-Risk: Human Capital in the Federal Government (February 1,
2001)
This hearing examined the January 2001 decision by the U.S.
General Accounting Office (GAO) to designate strategic human
capital management as a government-wide ``high risk.'' Since
1990, GAO has periodically reported on ``high-risk'' government
operations that it has identified as vulnerable to waste,
fraud, abuse, and mismanagement. GAO has determined that the
government's approach to managing its people (``human capital
assets'') is the critical missing link in reforming and
modernizing the Federal Government's management practices. The
combined effect of skills imbalances, succession planning
challenges, outdated performance management systems, and
staffing shortages places the ability of Federal agencies to
accomplish their missions at risk.
Witness: Hon. David M. Walker, Comptroller General of the
United States, and Chief Executive Officer, U.S. General
Accounting Office.
Mr. Walker explained that after a decade of government
downsizing and curtailed investments in human capital, it is
becoming increasingly clear that the Federal Government's human
capital strategies are inadequate to meet the needs of the
government and its citizens in the most effective, efficient,
and economical manner. He described the transformation needed
to establish an organizational culture within government that
promotes high performance and accountability, noting GAO's
opinion that the Federal Government has often acted as if
people were costs to be cut rather than assets to be valued.
Mr. Walker outlined several administrative and legislative
solutions to the crisis. He suggested the need to consider
modern performance management and incentive approaches and
discussed the importance of focusing on people as a strategic
asset. In addition, Mr. Walker emphasized the roles of the
Office of Management and Budget, the Office of Personnel
Management, and the Congress in the management and oversight of
human capital.
2. Assessing the District of Columbia Metropolitan Police Department's
Year 2000 Performance (March 22, 2001)
The Subcommittee assessed the District of Columbia
Metropolitan Police Department's achievement of its year 2000
performance goals. In keeping with the Subcommittee's oversight
of the implementation of the District's performance management
system, the Subcommittee selected the police department as a
case study to assess the District's progress.
Witnesses: John A. Koskinen, City Administrator of the
District of Columbia; Margret Nedelkoff Kellems, Deputy Mayor
for Public Safety and Justice, District of Columbia; and
Charles H. Ramsey, Chief of Police, District of Columbia
Metropolitan Police Department.
Mr. Koskinen discussed the District's effort to improve the
delivery of municipal services with the creation and
implementation of a performance management system. He spoke
positively about the establishment of goals to measure and
track agencies' performance. Ms. Kellems attested to the
accomplishments of Chief Ramsey, particularly community-
oriented policing and its impact on crime reduction. She
described how he achieved his performance goals and made
advancements in community relations and outreach efforts. Chief
Ramsey addressed the specific goals of the fiscal year 2000
performance accountability plan and described how the
Department accomplished them. Of particular note was Chief
Ramsey's efforts to make the Metropolitan Police Department
more visible and responsive to the public.
3. The National Security Implications of the Human Capital Crisis
(March 29, 2001)
This hearing, the eighth since January 1999 focusing on the
human capital management challenge facing the Federal
workforce, examined how the current and future loss of human
capital from government agencies is affecting and endangering
our national security establishment and the ability of the
Federal Government to defend our Nation and its interests
around the world. The hearing, held jointly with the
Subcommittee on Civil Service and Agency Organization of the
House of Representatives Committee on Government Reform,
considered the extent to which the Department of Defense has
and uses flexibilities in managing its civilian workforce.
Witnesses: Hon. James R. Schlesinger, Commissioner, on
behalf of the U.S. Commission on National Security/21st
Century, accompanied by Admiral Harry D. Train, USN-Ret.,
Commissioner, on behalf of the U.S. Commission on National
Security/21st Century; Henry L. Hinton, Jr., Managing Director,
Defense Capabilities and Management, U.S. General Accounting
Office; and Robert J. Lieberman, Deputy Inspector General,
Department of Defense.
Mr. Schlesinger and Admiral Train discussed the findings of
the Commission on National Security/21st Century review of U.S.
national security and addressed such critical areas as
contracting oversight, Presidential appointments, and
recruitment and retention in the Foreign Service, civil
service, and military personnel. Mr. Hinton discussed GAO's
evaluation of the Departments of Defense and State, noting that
while both departments have taken some action, much more
remains to be done to institute an overarching framework within
which future strategic workforce planning is conducted. Mr.
Lieberman provided an overview of previous audit and inspection
reports which address human capital challenges facing the
Department of Defense, most notably in the acquisition
workforce. Overall recommendations encompassed sweeping policy
reforms that would institute strategic planning to improve
recruiting, managing, and oversight of the Federal Government's
human capital.
4. The Outlook for the District of Columbia Government: The Post-
Control Board Period (June 8, 2001)
This hearing, held jointly with the Subcommittee on the
District of Columbia of the House of Representatives Committee
on Government Reform, sought to gain an understanding of the
progress made by the District of Columbia government during the
period under which responsibilities for the District's
governance were under the District of Columbia Management
Assistance Authority (also known as the ``Control Board''). The
Control Board was established by Congress and President Clinton
on April 17, 1995 (P.L. 104-8) to address the fiscal and
governance crisis facing the District of Columbia during the
1990s. At the time of this hearing, the District had achieved
four consecutive balanced budgets and was anticipating the
disbanding of the Control Board on September 30, 2001. The
hearing focused on the District's accomplishments in addressing
the financial and management challenges that led to the control
period, and on the appropriate financial and management
oversight mechanisms that should be in place during the post-
control period to ensure that the financial and management
stability and progress continues.
Witnesses: Natwar M. Gandhi, Chief Financial Officer,
District of Columbia; Charles C. Maddox, Inspector General,
District of Columbia; Joshua S. Wyner, Executive Director, D.C.
Appleseed Center; Renee Boicourt, Managing Director, Moody's
Investors Service; and Parry Young, Director, Public Finance
Department, Standard & Poor's; Hon. Alice Rivlin, Chair,
Financial Control Board; Hon. Anthony Williams, Mayor, District
of Columbia; Hon. Linda W. Cropp, Chair, Council of the
District of Columbia; and J. Christopher Mihm, Director,
Strategic Issues, U.S. General Accounting Office;
Mayor Williams testified on behalf of himself, Dr. Rivlin,
and Ms. Cropp, stating the District has achieved a balanced
budget and has met the statutory requirements since the control
period was instituted. Mayor Williams also discussed developing
an exit strategy that would include continuing the position of
Chief Financial Officer (CFO), preserving the autonomy of the
CFO, and retaining budget officials in the Executive and
Legislative Branches of the District for transparency. Mr. Mihm
recommended establishing an audit committee and suggested that
Congress may wish to specifically require the District to
notify Congress if certain predefined reportable events (such
as default on borrowing or failing to meet payroll) occur that
require the prompt attention of the District and Congress.
Mr. Gandhi urged the importance of an independent and
insulated CFO who develops and certifies financial data within
the District government. Mr. Maddox testified that the
Inspector General will continue to help foster accountability
and integrity by auditing the District government. Mr. Wyner
suggested having the District CFO act as the Treasurer and
Controller with a renewable 4-year term, direct control over
his personnel, and a role in certifying fiscal impact
statements and legislation. Ms. Boicourt testified that the
credit condition of the District is four ratings higher than it
was in 1995 due to the substantial improvement in the
District's finances and economy. Ms. Boicourt emphasized the
need for the District to continue to improve its public
services and management information. Mr. Young testified that
the District's investment rating is BBB+ on a scale of AAA to
D, emphasizing that the Control Board Act and the 1997 National
Capital Revitalization Act, along with strengthening economic
conditions, were significant factors in the District's improved
financial and administrative position.
5. Finding a Cure to Keep Nurses on the Job: The Federal Government's
Role in Retaining Nurses for Delivery of Federally-Funded
Health Care Services (June 27, 2001)
This hearing examined the root causes of nursing staff
shortages and the threat such shortages pose to the quality and
cost containment of federally funded health care and long-term
care programs, including Medicare, Medicaid, Veterans and
Defense health. Experts and practitioners shared their
experiences about the impact of staffing shortages on delivery
of services to beneficiaries under Federal programs. The
hearing probed how the Federal Government and others are, or
should be, responding to, coordinating, and addressing this
problem.
Witnesses: Rachel Weinstein, R.N., Director, Clinical
Standards Group, Office of Clinical Standards and Quality,
Centers for Medicare and Medicaid Services, U.S. Department of
Health and Human Services, accompanied by Thomas Hoyer,
Director, Chronic Care Purchasing Policy Group; Denise H.
Geolot, Ph.D., R.N., FAAN, Director, Division of Nursing,
Bureau of Health Professions, Health Resources and Services
Administration, U.S. Department of Health and Human Services
(HHS); Kathleen L. Martin, Rear Admiral, Director, Navy Nurse
Corps, U.S. Navy; Janet Heinrich, Director, Health Care--Public
Health Issues, U.S. General Accounting Office; Ann O'Sullivan,
MSN, R.N., President, Illinois Nurses Association, on behalf of
the American Nurses Association; Gary A. Mecklenburg, President
and Chief Executive Officer, Northwestern Memorial Hospital,
Chicago, on behalf of the American Hospital Association; Carol
Anne Bragg, R.N., President, SEIU Local 1998, the Professional
Staff Nurses Association in Maryland, and a member of SEIU's
Nurse Alliance; Hon. Lynn Martin, Chair, Panel on ``Future of
the Health Care Labor Force in a Graying Society,'' accompanied
by Mary Jo Snyder, Director of the Nursing Institute,
University of Illinois-Chicago, College of Nursing; and J.
David Cox, R.N., Vice President, National Veterans Affairs
Council for the American Federation of Government Employees
(AFGE), AFL-CIO.
Ms. Weinstein emphasized the commitment of HHS to provide
adequate and appropriate pay to health care providers. She also
stated that HHS is analyzing how to best ensure that Medicare
and Medicaid recipients receive appropriate compensation for
nursing homes and facilities and that staffing levels are
appropriate. Dr. Geolot projected that, with our aging
population, including the number of nurses nearing retirement
age, the United States faces a severe shortage of nurses unless
more individuals are brought into the profession within the
decade. She recommended that student loan programs for nurses
be continued and improved. Admiral Martin testified that the
military is also facing nursing shortages in its enlisted
ranks, reserves, civil service, and contract positions and
encouraged increasing compensation for nurses to help recruit
new personnel.
Ms. Heinrich noted that the demand for nurses is shifting
outside of hospitals, increasing the need for nurses. She
observed that inadequate staffing, heavy workloads, mandatory
overtime, and the need for increased compensation has resulted
in growing job dissatisfaction among nursing professionals. Ms.
O'Sullivan shared her concerns that managed care and Medicare
changes led to cost containment programs decreasing the number
of nurses on the job. Mr. Mecklenburg testified that 75 percent
of vacant positions in hospitals are for nurses. He contended
that there is a nursing shortage because nurses are retiring at
a higher rate, fewer people are entering nursing school, and
the number of patients needing care is increasing. Ms. Bragg
testified that nurses are leaving hospitals due to a
deteriorating work environment, staffing shortages, and abuse
of mandatory overtime. Ms. Martin recommended the need for long
term solutions to address the problems of nursing, including
improved wages and benefits, improved working environments,
best management practices from the private sector, and a public
commission to study how to encourage people to enter the
nursing profession. Mr. Cox described how Veterans
Administration hospitals have cut nurses by 10 percent and
nurses assistants by 30 percent. He argued that nurses are
overworked, have too many patients, and must work mandatory
overtime, leading to angry or upset patients, or worse, medical
errors.
6. Expanding Flexible Personnel Systems Governmentwide (July 17, 2001)
This hearing focused on the various personnel
flexibilities and special authorities granted by Congress to
specific government agencies to facilitate personnel retention,
recruitment, pay and promotion. This hearing built on the
foundation established in a series of hearings held by the
Subcommittee in the 106th Congress to address the Federal
Government's human capital challenges. The hearing showcased
three agencies, the General Accounting Office, the Internal
Revenue Service, and the Department of Defense, and considered
whether Congressional enactments granting these entities
certain personnel flexibilities had been useful and effective.
The hearing sought to identify lessons other agencies and
Congress could learn from the practical experiences of the
three agencies highlighted, including whether these
flexibilities should be extended more broadly.
Witnesses: Hon. David M. Walker, Comptroller General, U.S.
General Accounting Office; Hon. Sean O'Keefe, Deputy Director,
Office of Management and Budget; Hon. Charles O. Rossotti,
Commissioner, Internal Revenue Service; Hon. Charles S. Abell,
Assistant Secretary of Defense for Force Management Policy,
Department of Defense; Bobby L. Harnage, Sr., National
President, American Federation of Government Employee (AFGE),
AFL-CIO; Susan L. Shaw, Deputy Director of Legislation,
National Treasury Employees Union (NTEU); and Myra Howze
Shiplett, Director, Center for Human Resources Management,
National Academy of Public Administration.
Mr. Walker emphasized the importance of a strategic
approach to human capital management, one which is linked to
the agency's strategic plan, core values, and organizational
alignment. He also explained the initiatives GAO itself had
undertaken to enhance its value by better management of human
capital, and how other agencies may benefit from best practices
and GAO's self-assessment checklist. Mr. O'Keefe stressed the
importance of human capital to the President and his desire to
use the current flexibilities more effectively, while at the
same time looking to update the personnel system to modernize
performance incentives. Mr. Rossotti shared his experience in
implementing the Internal Revenue Service Restructuring and
Reform Act of 1998 (P.L. 105-205), including critical pay to
attract senior managers, streamlined hiring, travel, and
relocation procedures and a broadbanded pay system. Mr. Abell
discussed the personnel flexibilities and demonstration
projects in place at the Department of Defense for the civilian
workforce.
Mr. Harnage advocated four broad policy changes to address
the Federal Government's human capital crisis: Providing
comparable and competitive compensation; eliminating arbitrary
personnel ceilings; ending the practice of outsourcing and
privatization; and enhancing the value and reputation of public
service work. Ms. Kelley urged support for pay comparability
for Federal employees with the private sector and increased use
of recruitment and retention programs available under current
law. Ms. Shiplett encouraged increasing flexibility, adding
more demonstration projects and opening up demonstration
projects that are successful to other agencies and departments
who may wish to incorporate them.
7. Who Cares for the Caregivers?: The Role of Health Insurance in
Promoting Quality Care for Seniors, Children, and Individuals
with Disabilities (July 24, 2001)
This hearing examined health insurance for the over two
million caregivers who provide professional care services for
our Nation's seniors, children, and individuals with
disabilities. The Federal Government sponsors a wide variety of
caregiving programs either directly or through subsidies. Many
of these important caregivers receive low pay and lack
insurance to cover their own health care needs or the health
care needs of their dependents. This combination of low pay and
lack of health benefits has resulted in a high turnover rate in
the caregiving profession, posing a threat to the quality of
our Nation's care treatment and facilities. Reform options to
address this situation were reviewed, including Medicaid
expansion, enrollment in State and local employees' health
insurance programs, and subsidized private health insurance.
Witnesses: Jane Hayward, Deputy Director, Rhode Island
Department of Health and Human Services; Suzanne Mintz,
President and Co-Founder, National Family Caregivers
Association; James Stearns, Esq., Past President and Current
Board Member, United Cerebral Palsy Association; Yolanda Sims,
Hope School for the Developmentally Disabled Children,
Springfield, Illinois, on behalf of the American Federation of
State, County, and Municipal Employees; D.J. (Sam) Chapman,
Chief Nursing Administrator, Bureau for Children with Medical
Handicaps, Ohio Department of Health and National Secretary,
National Association of Home Care; and Mardell Bell, Local
#880, Service Employees International Union, Dolton, Illinois.
Ms. Hayward described the health care system in Rhode
Island, which provides health care to family care providers who
are licensed by the State. Ms. Mintz testified regarding the
plight of family caregivers, who spend an average of 18 to 20
hours per week caring for an elderly or disabled family member
without compensation. Mr. Stearns discussed providing funding
through Medicare and Medicaid to allow persons requiring direct
support attendants to employ and provide health insurance for
them. Ms. Sims shared her personal experiences with the high
costs associated with being a caregiver, including health
insurance expenses, even with the benefit of employer-provided
plans. Ms. Chapman commented on management difficulties facing
caregiver agencies, including challenges of retaining
employees, providing benefits, and covering business costs. She
urged that financing for caregivers be made available through
Medicare or Medicaid, which would relieve agencies from having
to choose between salary increases or health benefits. Ms. Bell
discussed her experience as a healthcare worker without health
insurance and the importance of expanding demonstration
projects that provide living wages and health benefits to
caregivers.
8. Food Safety and Security: Can Our Fractured Food Safety System Rise
to the Challenge? (October 10, 2001)
This hearing, a followup to two hearings held by the
Subcommittee in the 106th Congress, probed the current
fragmented structure of Federal food safety oversight to
determine whether it can adequately protect the American public
from possible food hazards. Following the events of September
11, 2001, Americans are more keenly focused on how varied
aspects of homeland security, including our Nation's food
supply, may be vulnerable to attack. This hearing examined
weaknesses in our existing food safety system with divided and
duplicative responsibilities of multiple agencies. The hearing
explored how a single food safety agency, based on science,
could promote greater accountability, maximize limited
resources, and ensure greater public confidence in the safety
of our food system.
Witnesses: Hon. Rosa L. DeLauro, U.S. House of
Representatives, Connecticut, 3rd District; Robert A. Robinson,
Managing Director, Natural Resources and the Environment, U.S.
General Accounting Office, accompanied by Keith W. Oleson,
Assistant Director, Natural Resources and the Environment, U.S.
General Accounting Office; Hon. Elsa Murano, Ph.D., Under
Secretary of Agriculture for Food Safety, U.S. Department of
Agriculture; Bernard Schwetz, Ph.D., D.V.M., Acting Principal
Deputy Commissioner, Food and Drug Administration, U.S.
Department of Health and Human Services, accompanied by Joseph
A. Levitt, Director, Center for Food Safety and Applied
Nutrition, Food and Drug Administration, U.S. Department of
Health and Human Services; Hon. Dan Glickman, Akin, Gump,
Strauss, Hauer & Feld, L.L.P., former Secretary of Agriculture,
U.S. Department of Agriculture (1995-2001); Michael F.
Jacobson, Ph.D., Executive Director, Center for Science in the
Public Interest (CSPI); John Cady, President and Chief
Executive Officer, National Food Processors Association; Peter
Chalk, Ph.D., Policy Analyst, RAND Corporation; C. Manly
Molpus, President and Chief Executive Officer, Grocery
Manufacturers of America; and Tim Hammonds, President and Chief
Executive Officer, Food Marketing Institute.
Congresswoman DeLauro discussed the Safe Food Act of 2001,
legislation that would create a single agency responsible for
all Federal food safety activities, which she introduced in the
House of Representatives and Senator Durbin introduced in the
Senate. Mr. Robinson renewed GAO's longstanding call for a
single food safety agency responsible for implementing uniform
and risk-based food safety laws. He emphasized that the present
patchwork design hampers the government's efforts to address
existing and emerging food safety threats, and leads to
inconsistent oversight and inefficient, inflexible deployment
of resources.
Dr. Murano described how the food safety system is
challenged by emerging pathogens, increased international
trade, new foods in the marketplace, the growing segment of the
population at greater risk of contracting food-borne illnesses,
and gaps in education. She outlined the USDA food safety
infrastructure of inspection, surveillance, research, and
education. Dr. Schwetz explained FDA's jurisdiction over 80
percent of domestic and imported foods marketed in interstate
commerce. He stressed the need for a strong science-based
system, an enhanced surveillance system, risk-based prevention
standards, and adequate enforcement to meet the food safety
challenges at the FDA. Mr. Glickman argued in support of a
single food safety agency. He shared his belief that the
current fragmented organization of the food safety system is
flawed and that piecemeal approaches to reform will fall short.
He stressed the need to improve the underlying food safety
statutory authority and adopt an integrated regulatory
structure to meet the challenges of terrorism.
Dr. Jacobson shared his concerns about using old laws to
regulate new hazards, with many gaps, inconsistencies, and
inefficiencies in government oversight. He conveyed CSPI's
support for legislation to establish a single, independent food
safety agency and a cohesive, coherent food safety statute. Mr.
Cady indicated that the objectives of legislation to create a
single food safety agency could be achieved by better utilizing
existing authorities, and that any reforms not weaken consumer
confidence in the safety of our food supply. Dr. Chalk outlined
his concerns that agriculture, which is critical to our
country's economic, social, and political stability, needs to
be part of infrastructure protection planning and investment.
He indicated support for a single food safety agency which
could streamline and rationalize oversight. Mr. Molpus endorsed
the current system, explaining that allocation of
responsibility among several agencies is logical and reflects
the informed judgments of lawmakers and government officials.
He argued that restructuring would be disruptive and difficult,
but offered four recommendations: More food safety resources
for the FDA, greater emphasis on science and research, a
commitment to collaboration, coordination, and consultation
among the varied agencies, and enhanced resources and tools to
effectively regulate imported products. Mr. Hammonds testified
that the current food safety system is ill-equipped to deal
with new challenges, and that designating a single food safety
agency is imperative to ensure coordination, avoid overlap, and
better utilize limited resources.
9. Promoting the Best Interests of Children: Proposals to Establish a
Family Court in the District of Columbia Superior Court
(October 25, 2001)
This hearing considered the components of S. 1382 and H.R.
2657, legislation pending before the Subcommittee which sought
to restructure the existing District of Columbia Superior Court
family division to address concerns about how child abuse and
neglect cases are handled within the Presidentially-appointed,
federally-funded local court system. At the time of the
hearing, more than 4,500 child abuse and neglect cases were
spread among the Superior Court's 59 trial judges, and many
children were remaining in foster care longer than Federal law
dictating permanent placements requires. The hearing examined
components of the reform bills, including such elements as
placing all cases involving one family before one judge,
assigning a cadre of magistrates to assist in the judicial
function of the court, mandating minimum terms for service on
the court, and transferring to the Family Court all child abuse
and neglect cases dispersed throughout the court system. The
hearing assessed varying perspectives on whether and how the
proposed changes might impact the ability of the court to
address the needs of some of the city's most fragile
residents--victims of child abuse and neglect.
Witnesses: Hon. Mike DeWine, U.S. Senator; Hon. Mary L.
Landrieu, U.S. Senator; Hon. Tom DeLay, Majority Whip, U.S.
House of Representatives; Hon. Eleanor Holmes Norton, U.S.
House of Representatives; Hon. Rufus G. King III, Chief Judge,
Superior Court of the District of Columbia, accompanied by Hon.
Lee Satterfield, Presiding Judge, Family Division, Superior
Court of the District of Columbia; Dr. Olivia Golden, Director,
District of Columbia Child and Family Services Agency; Deborah
Luxenberg, Chair, Children in the Courts Committee, Council for
Court Excellence; and Margaret J. McKinney, Co-Chair, Family
Law Section, District of Columbia Bar Association.
Senator Landrieu explained that the bipartisan legislation
she and Senator DeWine introduced was prompted by concerns
arising from the deaths of over 200 children under the care of
the District since 1987. She emphasized that the ``one family,
one judge'' principle underlying the bill was grounded in
extensive research about successful court restructuring efforts
in other jurisdictions. Congresswoman Norton commented that in
the course of development of the legislation, best practices
from family courts across the country were evaluated and
incorporated in the proposal, including ongoing training,
alternative dispute resolution, and utilizing a one family/one
judge policy. Congressman DeLay outlined three essential
elements of reform: A one judge/one child policy; 5-year terms
for judges, and case consolidation within the family court
system. Senator DeWine focused his comments on the need to
revamp the organization of the court to include sufficient
numbers of qualified and experienced judges committed to serve
sufficient terms in the family court, specialized training in
family law for the judges, and improved compliance with the
Adoption and Safe Families Act of 1997 (ASFA) (P.L. 105-89).
Judge King described several administrative actions he had
taken to address concerns about the handling of child welfare
cases, including assigning an additional judge to the child
abuse and neglect case docket, remodeling courtroom space,
rearranging calendars, and specialized training on the
requirements under the ASFA law. Judge King shared several
concerns posed by the Congressional reform proposals.
Specifically, he indicated that requiring all family law cases,
not just abuse and neglect matters, be transferred into the
proposed new court may be inappropriate. He also raised
concerns that the proposals would dismantle a highly successful
Domestic Violence Unit, mandate extensive judicial terms that
may not be in the best interests of families, and micromanage
the court in a way that would not permit necessary
administrative flexibility.
Ms. Golden recommended passing the bill to ensure that
changes would coincide with reforms at the Child and Family
Services Agency and provide a stronger legal support system for
all elements of the family court system, including judges,
lawyers, social workers, children, and parents. Ms. Luxenberg
shared her belief that the family division lacks adequate
resources, stressing that more funding is essential to achieve
the goals of the proposed legislation. She also expressed
concern about deferring implementation of the one child/one
judge provision for 18 months, urging that all newly filed
abuse and neglect cases should immediately follow the one
child/one judge approach. Ms. McKinney stressed the importance
of having attorneys with family law experience appointed to the
Family Court bench, noting that historically this has not
occurred. She recommended increased funding, that the court not
be micromanaged, and that judicial term limits not be
legislated.
10. Good Beginnings Last a Lifetime: How the Federal Government Can
Promote Affordable, Quality Child Care (January 28, 2002)
This hearing was conducted as a field hearing at the
Childgarden Child Development Center in St. Louis, Missouri and
jointly chaired by Senators Dick Durbin and Jean Carnahan. The
hearing was designed to identify ways that the Federal
Government can assist families, employers, and child care
providers in the search for affordable, quality child care. The
hearing examined some of the challenges of providing affordable
and quality child care in the bi-state St. Louis area. Problems
encountered by parents, providers, and businesses in accessing
child care as well as innovative programs that are working well
were discussed.
Witnesses: Lisa Eberle-Mayse, Director, Childgarden Child
Development Center; Steve J. Cok, parent of children in day
care; JoAnn Harris, parent of children in day care; Janice
Moenster, parent of children in day care; Teresa M. Jenkins,
Director, Office of Workforce Relations, U.S. Office of
Personnel Management (OPM); Sarah Kirschner, Missouri Childcare
at Work; Penny Korte, Daycare Owner/Director, P.A.L.S.,
Highland, Illinois; Corrine Patton, Manager, Missouri Child
Care Resource and Referral Network; and Kim E. Hunt, Illinois
Network of Child Care Resource and Referral Agencies (INCCRRA).
Ms. Eberle-Mayse described effective ways to recruit and
retain qualified child care providers, such as minimizing non-
salary expenses, fundraising, taking advantage of government
programs, creating a supportive work environment, and investing
in continuing education. Mr. Cok, Ms. Harris, and Ms. Moenster
shared their personal experiences as working parents facing the
challenge of finding affordable, quality child care. Ms.
Jenkins outlined some of the successful initiatives launched by
Federal agencies to provide child care assistance for their
employees, and OPM's efforts to provide agencies with models
for implementing child care subsidy programs. Ms. Kirschner
explained her perspectives on how businesses are impacted by
child care concerns and how successful programs such as
Missouri Child Care at Work encourage businesses to provide on-
site child care for their employees. Ms. Korte emphasized the
importance of providing daycare workers the requisite respect
and compensation for the work they perform, and discussed how
Federal assistance to help with recruitment and retention,
health care and retirement programs, and tax benefits for
working families could improve the circumstances facing parents
today. Ms. Patton discussed how her agency coordinates child
care resource and referral agencies and the importance of
services which help parents make informed decisions and help
providers, communities, and employers with technical assistance
and other specialized initiatives. Ms. Hunt shared innovative
practices and successful programs to improve access to high
quality child care in communities throughout Illinois.
11. Illicit Diamonds, Conflict and Terrorism: The Role of U.S. Agencies
in Fighting the Conflict Diamond Trade (February 13, 2002)
This hearing focused on efforts of U.S. Government agencies
in fighting the conflict diamond trade. The mining and sales of
diamonds by parties to armed conflicts, labeled ``conflict
diamonds,'' make up an estimated 3.7 percent to 15 percent of
the value of the global diamond trade. Conflict diamonds have
fueled rebel violence and egregious human rights violations
against civilian populations in countries such as Sierra Leone,
Angola, and the Democratic Republic of the Congo. The hearing
examined reports that conflict diamonds are being used by
terrorists to launder money. The hearing also outlined progress
in the ``Kimberley Process,'' which is a multilateral agreement
to control the export and import of diamonds, specifically
aimed at keeping conflict diamonds out of the marketplace.
Witnesses: Hon. Russell Feingold, U.S. Senator; Hon. Mike
DeWine, U.S. Senator; Hon. Judd Gregg, U.S. Senator; Hon. John
E. Leigh, Ambassador of Sierra Leone to the United States; Hon.
Joseph Melrose, former U.S. Ambassador to Sierra Leone; Loren
Yager, Director, International Affairs and Trade, U.S. General
Accounting Office; Alan Eastham, Special Negotiator for
Conflict Diamonds, U.S. Department of State; Timothy Skud,
Acting Deputy Assistant Secretary for Regulation, Tariff, and
Trade Enforcement, U.S. Department of the Treasury; and James
Mendenhall; Deputy General Counsel, U.S. Trade Representative.
Senator Feingold discussed both the scourge of conflict
that has been funded by the illicit diamond trade and the
benefits and economic growth that the legitimate diamond trade
can bring to developing countries. He called for long-term
policy options so that weak states would no longer be
attractive to criminals and terrorists as a base of operations.
Senator DeWine described the deplorable impact that conflicts
fueled by the illicit diamond trade have had on the children of
Sierra Leone, particularly rape, mutilation, and kidnaping of
children to serve in rebel armies. He also discussed the
economic clout the United States has as a major diamond
importer to stop the trade in conflict diamonds. Senator Gregg
stressed the need for legislation to ensure conflict diamonds
are not entering U.S. markets, and discussed past policies
toward the Revolutionary United Front (RUF) in Sierra Leone. He
pointed to the ways in which terrorist organizations use
conflict diamonds to finance their activities. He also called
for policy changes toward Liberia as essential for solving the
conflict diamond problem.
Ambassador Leigh discussed how conflict diamonds have
allowed the RUF to terrorize the government and people of
Sierra Leone. He distinguished the differences between conflict
and contraband diamonds. He also testified that stopping the
trade of illicit diamonds will help bring peace to Africa and
hamper criminal and terrorist activity. Ambassador Melrose
discussed many facets of the diamond trade in Sierra Leone,
pointing out that diamonds are easy to obtain since they are
panned, are ideal for laundering money, and that the government
has lost its ability to control the movement of diamonds from
the field to the market. He stressed the need to create a
system for preventing illicit diamonds from entering the
legitimate market.
Mr. Yager discussed the structure of the diamond trade. He
outlined the Kimberley Process and its lack of accountability;
the nature of diamonds as a commodity and how non-transparent
industry operations create opportunities for illicit trade; and
ways the current system is inadequately designed for the
detection of conflict diamonds. Mr. Eastham discussed the role
of the U.S. Department of State in combating conflict diamonds
through the United Nations and in negotiations as part of the
Kimberley Process. He spoke about efforts the United States was
taking to strengthen the Kimberley Process. Mr. Eastham also
described the role of diamonds in financing terrorist
activities by allowing terrorists to hoard wealth and avoid
legitimate banking circles. Mr. Skud discussed the role of the
U.S. Customs Service in enforcing diamond sanctions and the
current import prohibitions on conflict diamonds. Mr.
Mendenhall testified about current U.N. sanctions and possible
conflicts between the Kimberley Process, which would regulate
the rough diamond trade, and U.S. trade commitments under the
World Trade Organization.
12. A License to Break the Law? Protecting the Integrity of Driver's
Licenses and State IDs (April 16, 2002)
This hearing took a comprehensive look at problems relating
to the availability and use of fake or fraudulently issued
driver's licenses, with a particular focus on what the Federal
and State Governments can do to improve the system. Enhancing
the process by which driver's licenses are issued, and
improving the security of the cards to make them counterfeit-
resistant, will not only assist in the domestic combat against
terrorism, but can also help prevent underage individuals from
purchasing alcohol and tobacco products, keep problem drivers
off the streets, and provide law enforcement officials with
tools to fight identity theft.
Witnesses: Theodore W. Wern, Esq., Kirkland and Ellis,
Chicago, Illinois; Mary Ann Viverette, Chief of Police,
Gaithersburg, Maryland, on behalf of the International
Association of Chiefs of Police; Richard J. Varn, Chief
Information Officer, State of Iowa, on behalf of the National
Governors Association; Hon. Barbara P. Allen, State Senator,
Eighth District, Overland Park, Kansas; Betty L. Serian, Deputy
Secretary for Safety Administration, Pennsylvania Department of
Transportation, on behalf of the American Association of Motor
Vehicle Administrators (AAMVA); Barry J. Goleman, Vice
President, Public Sector, American Management Systems, Inc.,
and former President of AAMVA's information technology
subsidiary, AAMVAnet; and J. Bradley Jansen, Deputy Director,
Center for Technology Policy, Free Congress Foundation.
Mr. Wern related his personal experience as a victim of
identity theft, including the time-consuming process of
clearing his name of huge debts and traffic offenses incurred
by the person who stole his identity. Ms. Viverette explained
the importance of accurate identity documents to law
enforcement officials. She encouraged the Federal Government to
establish uniform minimum standards for drivers' licenses and
encouraged States to use a unique identifier and anti-
counterfeiting security device on State-issued cards. Mr. Varn
recommended that the Federal Government support an electronic
database to verify identity. Ms. Allen described her efforts to
enact a State law in Kansas requiring Social Security numbers
and a biometric identifier for obtaining drivers' licenses and
issuance of temporary documents until an individual's identity
is confirmed. Ms. Serian recommended Federal assistance to
States to help establish minimum standards for license
issuance, help State motor vehicle departments to identify
fraudulent documents, create an interstate driving record
database, and increase penalties for identity fraud. Mr.
Goleman, a former driver's license examiner in California,
recommended the Federal-State cooperative effort to implement
the Commercial Motor Vehicle Safety Act as a model to stop
counterfeiting of State licenses. He also discussed the
benefits of using biometrics and ``smart cards'' in tandem with
improved verification technologies to reduce identification
fraud. Mr. Jansen stated his strong opposition to any effort to
create a national identification card, contending that it would
limit privacy, freedom, and make identity fraud cases more
difficult to solve.
13. Vital Assets: Human Capital in Federal Economic Regulatory Systems
(April 23, 2002)
This hearing continued the Subcommittee's inquiry into the
human capital challenge by examining the problem in the context
of how well our country's economic regulatory agencies are
equipped to accomplish their missions. In January 2001, the
General Accounting Office released its report ``High-Risk
Series: An Update,'' which stated that ``(a) lack of sufficient
numbers of experienced staff with the right expertise limits
the ability of Commerce and two other trade agencies to monitor
and enforce trade agreements.'' Furthermore, the collapse of
Enron Corporation raised the question of whether our government
has the adequate staff to monitor the publicly traded companies
which form the foundation of our financial markets and economy.
The hearing showcased staff recruitment, selection, retention,
and training at the Securities and Exchange Commission (SEC),
the Commerce Department's International Trade Administration
(ITA), and the Office of the U.S. Trade Representative (USTR).
Witnesses: Loren Yager, Director, International Affairs and
Trade, U.S. General Accounting Office; Richard Hillman,
Director of Financial Markets and Community Investment, U.S.
General Accounting Office; Grant Aldonas, Under Secretary for
International Trade and Head, International Trade
Administration, U.S. Department of Commerce; James M.
McConnell, Executive Director, U.S. Securities and Exchange
Commission (SEC); Edward L. Blansitt, Deputy Inspector General,
U.S. Department of Commerce; Troy Cribb, Trade Counsel, Steptoe
and Johnson, L.L.P.; and Lynn Turner, Professor of Accounting,
Center for Quality Financial Reporting, Colorado State
University.
Mr. Yager discussed the GAO study of human capital at the
Department of Commerce, Department of Agriculture, and the
Office of the United States Trade Representative (USTR). He
identified increased workloads, as well as recruitment and
retention of trade experts and attorneys, as problems that need
to be addressed by all agencies. Mr. Hillman described the huge
increase in the SEC's workload over the past decade,
concomitant with staffing losses during the same period. Mr.
Aldonas described the growing demands at the International
Trade Administration (ITA) for analysis and enforcement in its
supportive role for USTR in negotiation, implementation, and
dispute resolution of trade agreements. He noted the ITA
continues to work to meet the goals set forth in previous GAO
recommendations through management and administrative tools.
Mr. McConnell explained how the enactment of pay parity will
improve the SEC's ability to recruit and retain a talented and
experienced staff, particularly as the Commission faces
increasingly more complex issues as new technologies,
participants, and financial products reshape our markets. Mr.
Blansitt discussed the Department of Commerce's identification
of the need to boost international compliance with trade
agreements and expand market access for American exporters as
vital issues facing the ITA. Mr. Blansitt outlined actions
taken within the Trade Compliance Center, including development
of a trade compliance manual to provide guidance for all ITA
staff and use of performance measures to assess effectiveness
and enhance ITA's efforts.
Ms. Cribb emphasized the growing complexity of trade
issues, and the importance of trained staff to handle
complicated health and safety, transportation, and
telecommunications issues. She also recommended upgrading
technology and encouraged staff rotation as a way to boost
interest and knowledge, while maintaining needed expertise. Mr.
Turner shared his perspectives that human capital problems
facing the SEC are the result of budget constraints keeping
staffing at low levels during a booming market, low pay leading
to high turnover rates, and low morale because SEC attorneys
face opponents with greater access to resources. He stressed
that in addition to human capital assets, the SEC needs tools
and resources, including automated management information
systems and improved training, to fulfill its mission.
14. Kids and Cafeterias: How Safe Are Federal School Lunches? (April
30, 2002)
The hearing, conducted jointly with the House of
Representatives Government Reform Subcommittee on Government
Efficiency, Financial Management, and Intergovernmental
Relations, examined the adequacy of government oversight of the
Federal school lunch program. The hearing considered how
managerial and organizational deficiencies may be adversely
affecting the health of school children. As the Chicago Tribune
reported in December 2001, there has been a 56 percent increase
from 1990-1997 in the number of outbreaks of illness from
school lunches. Distribution companies ship frozen school
entrees quickly throughout the United States and multi-state
cafeteria management contractors put them on menus in multiple
cities simultaneously, too often giving children instant access
to unsafe meals. A complex tapestry of food safety agencies
often do not share information with each other and rarely tell
schools when plants are cited or shut down for health
violations. The result of this system is sick children in our
Nation's schools.
Witnesses: Hon. Rosa L. DeLauro, U.S. House of
Representatives, 3rd District, Connecticut; Lawrence J.
Dyckman, Director, Natural Resources and Environment, U.S.
General Accounting Office; Lester M. Crawford, D.V.M., Ph.D.,
Deputy Commissioner, Food and Drug Administration (FDA), U.S.
Department of Health and Human Services; Hon. Elsa Murano,
Ph.D., Under Secretary of Agriculture for Food Safety, U.S.
Department of Agriculture (USDA); Caroline Smith DeWaal,
Director of Food Safety, Center for Science in the Public
Interest; Sue Doneth of Marshall, Michigan, on behalf of Safe
Tables Our Priority (STOP); John Bode, Counsel, National Food
Processors Association; Cheryl Roberts, Comer, Georgia, on
behalf of Safe Tables Our Priority (STOP), accompanied by Tyler
Roberts; and Mary Klatko, Administrator, Food and Nutrition
Service, Howard County Public Schools, Howard County Maryland,
on behalf of the American School Food Service Association.
Congresswoman DeLauro outlined her concerns about ensuring
the safety of food in the Federal School Lunch Program under
the current system and urged passage of legislation to
establish a single agency responsible for food safety which she
introduced in the House and which Senator Durbin introduced in
the Senate. Mr. Dyckman shared statistics about the extent of
the problem, specifically that each year 76 million people
suffer food borne illness, 325,000 of whom are hospitalized,
and 5,000 of whom die. He recommended revising the school food
service manual to include guidance regarding safety provisions
for procurement contracts, ensuring that State and local
officials have access to inspection and compliance records of
food suppliers, and sharing recall information of USDA donated
foods with State and local officials if there is a safety
concern. Dr. Crawford explained FDA's role in promoting food
safety from research to outbreak response to education for
consumers, health officials, and industry. He also noted FDA
oversees 80 percent of domestic and imported foods; including
where the food is produced, processed, packaged, stored, or
sold. Dr. Murano stated that when a commodity purchased by USDA
is flagged as a safety concern all appropriate agencies are
notified, an investigation is launched, and the food in
question is held. She also commented that schools contract 83
percent of their school lunch food and must make sure their
processors and distributors meet school standards for safety.
Ms. DeWaal described three gaps in the food safety system:
Outbreak recognition, outbreak response, and outbreak
prevention. She encouraged the FDA and USDA to increase their
resources for inspections and require more tests of ground meat
sold to the school lunch program, and urged Congress to create
a single food safety agency. Ms. Doneth explained the suffering
her family experienced after her daughter contracted Hepatitis-
A after eating frozen strawberries in her school lunch and
later when another daughter consumed food infected with E. Coli
0157:H7. Mr. Bode testified that he did not support recall
authority for FDA and USDA because the food industry has
consistently cooperated in recalls, that a mandatory recall
would have to be done with due process, and that questions
about responsibility for an inappropriate recall were
unresolved. Mr. Bode also discouraged creation of a single food
agency noting the regulatory system and culture of the agency
would not be fundamentally different and would not improve
coordination with State and local officials which he argued are
vital to more effective recalls. Ms. Roberts described her
son's experience after contracting E. Coli 0157:H7 from a
hamburger he ate at school. She stressed the need for local
health officials and the media to report the causes of food
borne illness outbreaks.
15. Tobacco's Deadly Secret: The Impact of Tobacco Marketing on Women
and Girls (May 14, 2002)
This hearing focused on the impact of smoking on the health
of women and girls, particularly the role of tobacco
advertising on smoking initiation among women and girls. The
hearing probed what can and should be done to address the
epidemic of smoking-related disease in women, including efforts
that the Federal Government is or should be undertaking. The
U.S. Surgeon General issued a report in 2001 highlighting the
health impact of smoking on women and girls, including that
women now account for 39 percent of all smoking-related deaths
in the United States, more than double the level in 1965. Lung
cancer is the leading cause of cancer death among women,
surpassing breast cancer in 1987. Meanwhile, increased
marketing by tobacco companies has stalled progress in smoking
cessation by women and spurred recent increases in smoking
among teenage girls.
Witnesses: Cassandra Coleman, and her daughter, Nzingha
Coleman, Chicago, Illinois; Elizabeth Whelan, Sc.D., MA, MPH,
President, American Council on Science and Health, New York,
New York; Charles King, III, J.D., Ph.D, Assistant Professor,
Harvard Business School, Boston, Massachusetts; Cristina Beato,
M.D., Deputy Assistant Secretary for Health, U.S. Department of
Health and Human Services; Diane E. Stover, M.D., FCCP, Head,
Division of General Medicine, Chief, Pulmonary Service,
Memorial Sloan-Kettering Cancer Center, New York, New York, on
behalf of the American College of Chest Physicians; and Matthew
L. Myers, President, Campaign for Tobacco-Free Kids.
Ms. Coleman discussed her struggle to quit smoking after 25
years after the realization that her smoking caused her two
children to develop asthma and leaky heart valves. Nzingha
Coleman shared her observations about smoking-related health
problems and commented on the young age at which some girls
start smoking. Dr. Whelan shared the results of the American
Council on Science and Health's most recent survey of tobacco
advertising in women's magazines, noting findings that
magazines which do not accept tobacco ads also have the most
information about the health risks of tobacco usage. Dr. King
discussed the findings of his study published in the New
England Journal of Medicine, documenting trends in tobacco
company advertising in magazines with a youth readership and
the effectiveness of this kind of advertising. Dr. Beato
testified regarding the Surgeon General's report about patterns
of tobacco use among women and girls, including when and why
girls start smoking, what factors influence smoking, and the
role tobacco marketing plays in influencing girls to start
smoking. Dr. Stover described specific health problems that
smoking causes in women including menstrual irregularity,
infertility, and early menopause. Mr. Myers advocated the need
for a Federal policy to address the smoking epidemic among
women and girls, including encouraging the Food and Drug
Administration and the Center for Medicare and Medicaid
Services to take more active roles to protect the health of
women.
16. Half a Loaf--The Impact of Excluding Surplus Commodities from
America's Response to Global Hunger (June 4, 2002)
The hearing examined the structure, scope and effectiveness
of U.S. food aid programs and the likely impact of legislative
and administrative changes under consideration. The
administration's FY 2003 budget proposal contained an overall
reduction of some $300 million in U.S. food aid budgets,
eliminated surplus commodity donations, sharply reduced
monetization of commodities and requested no funding for the
``global school lunch'' initiative launched in 2000. It also
reorganized and consolidated oversight responsibilities between
the U.S. Agency for International Development and the U.S.
Department of Agriculture. Taken together, these steps have
significant implications for the government's partner
organizations and the hungry populations they help feed.
Witnesses: Hon. George McGovern, former U.S. Senator, and
former U.S. Ambassador to the Food and Agriculture
Organization; Hon. James P. McGovern, U.S. House of
Representatives, 3rd District, Massachusetts; Loren Yager,
Director, International Affairs and Trade Group, U.S. General
Accounting Office; Hon. A. Ellen Terpstra, Administrator,
Foreign Agricultural Service, U.S. Department of Agriculture
(USDA); Hon. Roger Winter, Assistant Administrator, Bureau of
Democracy, Conflict and Humanitarian Assistance, U.S. Agency
for International Development (USAID); Ellen S. Levinson,
Executive Director, Coalition for Food Aid; and Jason Phillips,
Country Director, International Rescue Committee, Kenya.
Senator McGovern described the growing problem of world
hunger with millions of hungry children, and the positive
impact that United Nations-sponsored school food programs have
had on boosting enrollment in schools, especially among girls.
He emphasized the importance of U.S. leadership and
Congressional funding for global hunger relief programs.
Congressman McGovern testified how U.S. food aid programs have
led to increased sales of U.S. agricultural products and have
helped encourage economic growth and development in the
countries receiving aid. He stressed the importance of using
surplus commodities to combat global hunger and attack poverty,
illiteracy, and lack of economic opportunity.
Mr. Yager discussed management and operation of U.S. food
aid programs including why aid fluctuates year to year, the six
different food aid programs administered by two different
Federal agencies which deliver food aid, and management of food
aid programs. Ms. Terpstra described USDA's comprehensive
review in 2001 of U.S. foreign food aid programs, noting that
it uncovered concerns that the number of programs and
administering agencies has resulted in inefficiencies and that
expanded use of surplus commodities has led to uncertainties
about future food availability on both recipient countries and
distributing agencies. She outlined the steps the
administration was undertaking to reduce chronic world hunger
and promote economic security. Mr. Winter emphasized USAID's
active participation and concurrence in the food aid review,
noting that program changes and realignment should improve the
ability to manage the programs.
Ms. Levinson expressed her organization's concerns about
the food aid review and that the recently passed farm bill
legislation will eliminate nearly all surplus donations. She
argued that decisions to use half of all international food aid
for emergencies will not reduce chronic hunger and
undernourishment problems, and that 800,000 metric tons of
increased food aid will not adequately replace the two to six
million metric tons of food aid that will be lost by
eliminating surplus donations. Mr. Phillips shared his
experiences managing a health and feeding program in Kenya's
Kakuma refugee camp. He described the deteriorating situation
of food rations and the high rate of malnutrition in the camp,
which he attributed to an abandonment of minimum international
humanitarian standards in food assistance. He offered several
recommendations to provide more durable solutions for the
refugees, including having the United States engage in
multilateral diplomacy to share the burden among donor
communities, continuing support for resettlement, exploring
more aggressive and creative opportunities for voluntary
repatriation, and continuing efforts to achieve peace in
countries generating Kenyan refugees, notably Sudan and
Somalia.
17. When Diets Turn Deadly: Consumer Safety and Weight-Loss Supplements
(July 31, 2002)
This hearing focused on the role and responsibility of the
Federal Government to ensure the safety of nutritional
supplements. The hearing probed whether health concerns raised
by other governments and organizations are valid, what actions
the Federal Government should take in light of product recalls
in Canada, and whether the Dietary Supplement Health and
Education Act (DSHEA) of 1994 and the system through which
adverse events are reported to the government are working to
adequately protect American consumers from dangerous
supplements.
Witnesses: Janet Heinrich, Director, Health Care--Public
Health Issues, U.S. General Accounting Office; Michael F.
Mangano, Principal Deputy Inspector General, Office of the
Inspector General, U.S. Department of Health and Human
Services; Joseph A. Levitt, Esq., Director, Center for Food
Safety and Applied Nutrition, Food and Drug Administration,
U.S. Department of Health and Human Services, accompanied by
Dr. Christine Lewis Taylor, Director, Office of Nutritional
Products, Labeling and Dietary Supplements (ONPLDS), Center for
Food Safety and Applied Nutrition (CFSAN), and John Taylor,
Director, Office of Enforcement, Office of Regulatory Affairs
(ORA), Food and Drug Administration (FDA); Karen Ruiz,
Consumer, San Clemente, California; Steven B. Heymsfeld, M.D.,
Deputy Director, New York Obesity Research Center, St. Luke's-
Roosevelt Hospital Center, Professor of Medicine, Columbia
University, College of Physicians and Surgeons; Michael
McGuffin, President, American Herbal Products Association
(AHPA), Silver Spring, Maryland; and Cynthia T. Culmo, R.Ph.,
Chairperson, Drugs, Devices, and Cosmetics Committee,
Association of Food and Drug Officials, Austin, Texas.
Ms. Heinrich outlined GAO's evaluation of dietary
supplement oversight, noting that weaknesses in FDA's voluntary
adverse event reporting system and lack of clinical trial
evidence have hindered FDA's ability to address safety
concerns. She stated that FDA has been slow to finalize good
manufacturing practices rules which could help in oversight of
product dosage and contamination issues. She indicated that
Federal efforts have predominantly focused on marketing
oversight rather than safety oversight. Mr. Mangano cited three
deficiencies in the voluntary adverse event reporting system,
specifically that it detects few adverse events due to the
system's inherent passivity; that it lacks sufficient
information about consumer medical records, product
ingredients, and identity of manufacturers to meaningfully
analyze reported events and any public health concerns; and it
does not permit analysis of data to determine whether action in
the interest of public health is warranted. Mr. Levitt
discussed FDA's strategic plan for full implementation of the
DSHEA requirements, stressing the need for increased resources,
better research, and a framework for evaluating product safety.
Ms. Ruiz described her personal experience with using
ephedra products to lose weight and increase energy, and the
resultant adverse consequences on her health, including manic
episodes, paranoia, and loss of sleep. She urged that
supplement product manufacturers bear the burden of proving
safety, that warnings be posted, and that labeling include a
contact number for the FDA. Dr. Heymsfield explained that the
number of subjects studied in clinical trials of dietary
supplements has been quite small and since they are carefully
screened, are healthier than the general consumer population.
He noted that even among healthy subjects, stimulant side
effects were experienced, such as palpitations and elevated
blood pressure. He posited that because dietary supplements
fall outside the realm of regulated drugs which must meet
stringent safety and effectiveness standards, passage of DSHEA
opened up a window for the marketing of ineffective or unsafe
products to highly vulnerable populations. Mr. McGuffin shared
his organization's belief that FDA enforcement of labeling and
advertising requirements for dietary supplements under DSHEA
could be strengthened. He stressed the benefits of industry
self-regulation, and recommended that the FDA adopt the
labeling and dosage guide used by his organization to ensure
products meet label claims, and are not used by children or
individuals with preexisting conditions, who could have adverse
reactions. Ms. Culmo testified that ephedrine alkaloid products
have generated the most adverse event reports of any dietary
supplement. She noted that while Federal rules prohibit drug
products containing ephedrine to be combined with other
stimulants, currently marketed (but unregulated) dietary
supplements which contain ephedrine do include other stimulants
and other active ingredients, which have complex interactions
and safety impacts. She called for premarket safety reviews,
manufacturer and distributor registration with the FDA, product
listing, mandatory adverse event reporting, a single adverse
event reporting system, enhanced intergovernmental
communication, defined criteria for standard of risk, a center
for regulatory oversight of dietary supplements, and
appropriate funding for oversight responsibilities.
18. Responding to the Public Health Threat of West Nile Virus
(September 24, 2002)
The hearing, held jointly with the Senate Committee on
Health, Education, Labor and Pensions, focused on the emerging
health threat posed by West Nile virus, as well as the adequacy
of the Federal and State response to increased disease
incidence. Ongoing research related to the virus was explored
along with future challenges facing various Federal and State
agencies to effectively respond to health threats posed by
naturally occurring infectious diseases.
Witnesses: Julie Louise Gerberding, M.D., M.P.H., Director,
Centers for Disease Control and Prevention, U.S. Department of
Health and Human Services; Anthony Fauci, M.D., Director,
National Institute of Allergy and Infectious Diseases, National
Institutes of Health (NIH); Jesse L. Goodman, M.D, M.P.H,
Deputy Director, Center for Biologics Evaluation and Research,
Food and Drug Administration, U.S. Department of Health and
Human Services; Sidney Andrew Houff, M.D., Ph.D., President and
Chairman, Department of Neurology, and Director, Neuroscience
and Aging Institute, Loyola University Medical Center, Maywood,
Illinois; John R. Lumpkin, M.D., Director, Illinois Department
of Public Health, Springfield, Illinois; Nickie Monica, Parish
President, St. John the Baptist Parish, LaPlace, Louisiana, and
Fay W. Boozman, M.D., MPH, Director, Arkansas Department of
Health.
Dr. Gerberding explained that West Nile Virus is a
mosquito-borne virus which moves through birds and mosquitos.
As of the date of the hearing, there were 1,965 human cases in
32 States and the District of Columbia, with 94 deaths. She
recommended eliminating standing water and use of insect
repellant and window screens. Dr. Fauci described the three
arenas of research conducted by the NIH: Basic research, vector
research, and vaccine development. Dr. Goodman addressed the
issue of the safety of the blood supply at blood banks and
risks associated with receiving donated blood and organs. He
emphasized the need to develop a test to screen donor blood for
West Nile Virus before it goes to a recipient. Dr. Houff
testified there has been a change in the clinical
manifestations of the West Nile Virus and that treatment is
presently limited to supportive therapy. He stressed the
importance of surveillance centers to monitor arbovirus
infections. Dr. Lumpkin described efforts underway in Illinois,
which has been among the States affected hardest by the
outbreak. He addressed the impact of State and local budget
constraints on the ability to devote needed resources to the
problem, stressing the need for Federal assistance. He urged
continuation of research among the avian population and
intensive study of communities where the outbreaks have
occurred. Mr. Monica discussed the measures taken in his
community to combat the West Nile Virus, including the
implementation of a mosquito control program, spraying, and
public education to minimize larvae hatchings near homes and
businesses. He implored the Federal Government to provide
emergency funding for expanded surveillance, testing, and
laboratories. Dr. Boozman proposed more immediate assistance to
States which are dealing with the virus on a daily basis for
spraying, larvacide, and education programs. He noted the
critical need to invest in public health laboratories to
increase their capacities to meet the challenges of emerging
diseases.
19. Ephedra: Who is Protecting the American Consumers? (October 8,
2002)
This hearing, a followup to the Subcommittee's July 31,
2002 introductory hearing on oversight of dietary supplements,
focused more specifically on ephedra-containing products. The
hearing delved into what U.S. Government agencies and private
organizations are doing to protect consumers from harm from
these products. The hearing examined the current voluntary
adverse event reporting system for dietary supplements and
whether this system is adequate to protect public health. The
hearing emphasized that hazardous products are being sold that
people are led to believe are safe, that issuance of rules to
implement Federal law on dietary supplement enacted 8 years ago
has been too slow, and that much work remains to be done by
both FDA and Congress to meet the government's obligation to
protect American consumers.
Witnesses: Kevin and Debbie Riggins, Lincoln, Illinois;
Charles Fricke, Logan County Coroner, Lincoln, Illinois; Lanny
J. Davis, Esq., Counsel, on behalf of David W. Brown,
President, and Chief Executive Officer, Metabolife
International, Inc., San Diego, California; J. Howard Beales,
III, Ph.D., Director, Bureau of Consumer Protection, U.S.
Federal Trade Commission; Bill Jeffery, LL.B., National
Coordinator, Centre for Science in the Public Interest (CSPI),
Carleton University, Ottawa, Ontario, Canada; Ronald M. Davis,
M.D., Board of Trustees, American Medical Association, Chicago,
Illinois; Sidney M. Wolfe, M.D., Director, Public Citizen
Health Research Group; Frank D. Uryasz, President, The National
Center for Drug Free Sport, Inc., Kansas City, Missouri, on
behalf of the National Collegiate Athletic Association (NCAA);
Lester M. Crawford, D.V.M., Ph.D., Acting Commissioner, Food
and Drug Administration, U.S. Department of Health and Human
Services. Robert Occhifinto, President of NVE Pharmaceuticals,
the manufacturer of Yellow Jackets, declined the Subcommittee's
invitation to testify on the basis of a schedule conflict.
Mr. and Mrs. Riggins related their experience as the
parents of Sean Riggins, a healthy, 16-year-old high school
student and athlete, who tragically died after using an ephedra
product known as ``Yellow Jackets.'' Mr. Riggins expressed his
concern about the easy access to dangerous herbal supplements
in flashy packaging attractive to young people, and the need
for regulations prohibiting sale to minors. Mr. Fricke
described his coroner's examination into the cause of Sean's
death, explaining that the forensic pathologist determined that
Sean's death from an acute myocardial infarction (severe heart
attack) was consistent with the effects of ephedrine. Mr.
Fricke also explained how easy it is to obtain the products and
how Sean's death has heightened the awareness among youth and
the community about the dangers of the product.
Senator Durbin reviewed the findings of a report prepared
by the minority staff of the House Government Reform Committee
Special Investigations Division, in tandem with Senator
Durbin's staff, which is the first independent analysis of over
14,000 adverse event reports turned over to the FDA by
Metabolife, Inc., a dietary supplement manufacturer. The
findings reflected that the reports involve many significant
adverse events and conflict with Metabolife's statements that
it was unaware of consumer reports of adverse health effects.
Moreover, the report finds that Metabolife took a careless
approach to the adverse event reports, did not report them in a
timely fashion to FDA, and routinely failed to obtain the
medical records necessary to evaluate the safety of its
products.
Mr. Davis stressed that Metabolife be used only for weight
control purposes, at the recommended dosage level, and under
the supervision of a doctor. He also rejected the reliability
of adverse event reports, calling them unreliable and flawed.
Dr. Beales described FTC's role in policing deceptive
advertising practices and ensuring that products do not
exaggerate or make unfounded claims about safety. He also
stated the FTC has filed over 80 law enforcement actions over
the past decade challenging false or unsubstantiated claims
about efficacy or safety of dietary supplements. Mr. Jeffery
testified about the January 2002 decision of the Canadian
Government to issue a voluntary recall of all ephedra products
after 60 adverse event reports and one death occurred. The
Canadian Government determined that there was a ``reasonable
probability that use of or exposure to ephedra products will
cause serious adverse health consequences or death.'' Dr. Davis
stated that the physician members of the AMA are very concerned
about the quality, safety, and efficacy of dietary supplements,
believe that DSHEA does not provide for adequate FDA oversight
of dietary supplements, and strongly support removal of dietary
supplements containing ephedrine alkaloids from the U.S.
market.
Dr. Wolfe shared information about the ban of sale of
ephedra-containing products in U.S. Army and Air Force military
exchanges and commissaries worldwide. He questioned why the FDA
has failed to act to ban ephedra alkaloid-containing dietary
supplements, despite evidence of the hazards. Mr. Uryasz
discussed the NCAA's concerns that the use of ephedrine was
being so closely linked to athletic performance and how that
led to NCAA's inclusion of ephedrine on its list of banned
substances. He outlined NCAA's expanded testing and prevention
educational programs on the dangers of ephedrine usage.
Dr. Crawford described FDA's regulatory and enforcement
authority and actions on dietary supplements, emphasizing that
unlike prescription drugs and over-the-counter drugs, the DSHEA
places the burden of proof on the government, rather than the
manufacturer, to prove a dietary supplement product is not safe
and effective. He announced FDA's recent efforts to publish
proposed rules on good manufacturing practices. Dr. Crawford
also noted that a study by the RAND Corporation analyzing the
published work on ephedrine is underway with results expected
by year end.
II. GAO Reports
During the 107th Congress, the Subcommittee worked in
conjunction with the General Accounting Office on the following
reports and studies:
Human Capital: Key Principles From Nine Private Sector
Organizations, GGD-00-28 (01/31/2000)
District of Columbia Government: Performance Report's
Adherence to Statutory Requirements, GGD-00-107 (04/14/2000)
Financial Management: Census Monitoring Board
Disbursements, Internal Control Weaknesses, and Other Matters,
AIMD-00-317 (09/29/2000)
D.C. Criminal Justice System: Better Coordination Needed
Among Participating Agencies, GAO-01-187 (03/30/2001)
Managing for Results: Human Capital Management Discussions
in Fiscal Year 2001 Performance Plans, GAO-01-236 (04/24/2001)
District of Columbia: Comments on Fiscal Year 2000
Performance Report, GAO-01-804 (06/08/2001)
Food Safety and Security: Fundamental Changes Needed to
Ensure Safe Food, GAO-02-47T (10/10/2001)
D.C. Tuition Assistance Grants: Program May Increase
College Choices, but a Few Program Procedures May Hinder Grant
Receipt for Some Residents, GAO-02-265 (01/31/2002)
Private Health Insurance: Access to Individual Market
Coverage May Be Restricted for Applicants with Mental
Disorders, GAO-02-339 (02/28/2002)
Preliminary Information on Proposal for Next-Day
Destruction of Records Generated by the National Instant
Criminal Background System (NCIS), GAO-02-511R (03/11/2002)
District of Columbia: Performance Report Reflects Progress
and Opportunities for Improvement, GAO-02-588 (04/15/2002)
DCPS: Attorney's Fees for Access to Special Education
Opportunities, GAO-02-559R (07/10/2002)
Gun Control: Potential Effects of Next-Day Destruction of
NICS Background Check Records, GAO-02-653 (04/10/2002)
Results-Oriented Cultures: Insights for U.S. Agencies from
Other Countries' Performance Management Initiatives, GAO-02-862
(08/02/2002)
Results-Oriented Cultures: Using Balanced Expectations to
Manage Senior Executive Performance, GAO-02-966 (09/27/2002)
Human Capital: Effective Use of Flexibilities Can Assist
Agencies in Managing Their Workforces, GAO-03-2 (10/21/2002)
III. Legislation
The following bills were considered by the Subcommittee on
Oversight of Government Management, Restructuring and the
District of Columbia during the 107th Congress:
Measures Enacted into Law
S.1382--The District of Columbia Family Court Act of 2001.
This bill addresses growing concerns about how child welfare
proceedings are handled within the Presidentially-appointed,
federally-funded local court system in the District of
Columbia. Mounting numbers of child abuse and neglect cases,
and the tragic deaths of some 200 children while in the
District's foster care system, prompted the introduction of
this bill to restructure the District of Columbia Superior
Court. The bill redesignates the existing Family Division as
the Family Court, revamps and consolidates the management of
child abuse and neglect case dockets, and requires recruitment
and retention of trained and experienced judges to serve in the
Family Court. The bill was introduced on August 3, 2001 by
Senators Mike DeWine and Mary Landrieu and was referred to the
Senate Committee on Governmental Affairs. On September 10,
2001, the bill was referred to the Subcommittee, which held a
hearing, ``Promoting the Best Interests of Children: Proposals
to Establish a Family Court in the District of Columbia
Superior Court'' on October 25, 2001. The hearing was an
opportunity to hear from bill sponsors, judicial
administrators, practitioners, and experts about the components
of S. 1382 and a similar House bill, H.R. 2657. S. 1382 was
polled out of the Oversight of Government Management,
Restructuring and the District of Columbia Subcommittee on
November 12, 2001. On November 14, 2001, S. 1382 was considered
by the full Committee on Governmental Affairs. A substitute
amendment, developed in collaboration with Senate sponsors, was
offered by Senator Durbin, and adopted by voice vote. S. 1382,
as amended, was ordered reported by the Committee on
Governmental Affairs by voice vote (S. Rept. 107-107). The
Subcommittee concurrently reported the similar House bill, H.R.
2657 as amended (S. Rept. 107-108). H.R. 2657, more fully
described below, became the vehicle to advance this legislation
to enactment (P.L. 107-114).
H.R. 2657--District of Columbia Family Court Act of 2001.
This bill, like a similar Senate bill (S. 1382) described
above, addresses the need to restructure how child welfare
proceedings are handled within the Presidentially-appointed,
federally-funded local court system in the District of
Columbia. The bill redesignates the Family Division as the
Family Court, revamps and consolidates the management of child
abuse and neglect case dockets, and requires recruitment and
retention of trained and experienced judges to serve in the
Family Court. H.R. 2657, introduced on July 26, 2001 by
Representative Tom DeLay and cosponsored by Delegate Eleanor
Holmes Norton and Representatives Connie Morella and Tom Davis,
was referred to the Committee on Government Reform. On August
13, 2001, H.R. 2657 was referred to the Subcommittee on the
District of Columbia, which held a mark-up session to consider
the bill that same day. On September 20, 2001, H.R. 2657 was
passed by the House of Representatives under suspension of the
rules by a vote of 408-0. On September 21, 2001, H.R. 2657 was
received in the Senate, and was referred to the Senate
Committee on Governmental Affairs. The bill was referred to the
Subcommittee on October 16, 2001. On October 25, 2001, the
Subcommittee conducted a hearing, ``Promoting the Best
Interests of Children: Proposals to Establish a Family Court in
the District of Columbia Superior Court'' to consider the
elements of H.R. 2657 and the similar S. 1382, including
provisions to place all cases involving one family before one
judge, assign a team of magistrates and social workers to
assist the judicial function, mandate minimum terms for service
for judges on the Family Court, and transfer all child abuse
and neglect cases now dispersed across the court back under a
Family Court helm. H.R. 2657 was polled out of the Subcommittee
on November 12, 2001. On November 14, 2001, H.R. 2657 was
considered by the full Committee on Governmental Affairs. A
substitute amendment, developed in collaboration with Senate
bill sponsors, was offered by Senator Durbin. The Durbin
amendment was adopted by voice vote, and H.R. 2657, as amended,
was ordered reported by voice vote (S. Rept. 107-108). On
December 14, 2002, by unanimous consent, the Senate adopted the
committee substitute amendment to H.R. 2657 and a manager's
amendment offered by Senators Lieberman and Thompson, and
passed the bill, as amended. On December 19, 2001, the House of
Representatives, under suspension of the rules, agreed to the
Senate amendment on a roll call vote of 418-1. On January 8,
2002, the President signed the bill into law as Public Law 107-
114.
H.R. 1499--District of Columbia College Access Improvement
Act of 2002. This bill eliminates the requirement under the
District of Columbia College Access Act of 1999 that residents
of the District of Columbia must continue on to college within
3 years of high school graduation in order to be eligible for
tuition assistance through the College Access Act program. The
bill expands the list of eligible institutions to include
private Historically Black Colleges and Universities
nationwide. The bill also expands the universe of eligible
students to include all District of Columbia residents who have
resided in the District of Columbia for at least 5 consecutive
years prior to applying for the program and who are enrolled at
an eligible institution as of the date of enactment of this
Act. The bill requires that a dedicated account be established
for the resident tuition support program, and clarifies
requirements on the use of administrative funds. H.R. 1499 was
introduced as the District of Columbia College Access Act
Technical Corrections Act of 2001, on April 4, 2001, by
Representative Connie Morella, Delegate Eleanor Holmes Norton,
and Representative Tom Davis. H.R. 1499 was approved by
unanimous consent by the House Subcommittee on the District of
Columbia on June 26, 2001, ordered to be reported by the full
Committee on Government Reform on July 25, 2001, and passed by
the House of Representatives on July 30, 2001 by voice vote.
H.R. 1499 was received in the Senate on July 31, 2001 and was
referred to the Committee on Governmental Affairs. The bill was
referred to the Subcommittee on September 10, 2001. The bill
was favorably polled out of the Subcommittee on November 8,
2001, and considered by the full Committee on November 14,
2001. An amendment in the nature of a substitute offered by
Senator George Voinovich was adopted by voice vote. The
Committee ordered the bill favorably reported, as amended, by
voice vote (S. Rept. 107-101). On December 12, 2001, by
unanimous consent, the full Senate adopted the Committee
substitute, a Lieberman amendment to clarify the inclusion of
certain individuals, and passed H.R. 1499, as amended. On March
12, 2002, the House of Representatives agreed to the Senate
amendments with further amendments pursuant to H.Res. 364 by
voice vote. By unanimous consent, the Senate agreed to the
House amendments to the Senate amendments on March 14, 2002. On
April 4, 2002, the President signed the bill into law as Public
Law 107-157.
H.R. 2061--To amend the Charter of Southeastern University
of the District of Columbia. This bill eliminates a requirement
in the charter of the Southeastern University of the District
of Columbia that one third of its Board of Trustees be
comprised of alumni of the institution. H.R. 2061 was
introduced in the House of Representatives on June 5, 2001 by
Delegate Eleanor Holmes Norton. The bill was referred to the
House Committee on Government Reform, and subsequently to the
Subcommittee on the District of Columbia, which considered the
bill and advanced it to the full committee on July 9, 2001. On
July 25, 2001, the House Government Reform Committee approved
the bill by voice vote and ordered it reported. The House of
Representatives considered the bill under suspension of the
rules and adopted the bill by voice vote on September 20, 2001.
H.R. 2061 was received in the Senate on September 21, 2001, and
referred to the Committee on Governmental Affairs. It was
referred to the Subcommittee on October 16, 2001. The bill was
unanimously polled out of the Subcommittee on November 7, 2001.
The full Senate Committee on Governmental Affairs considered
H.R. 2061 on November 14, 2001 and ordered the bill favorably
reported by voice vote (S. Rept. 107-102). The Senate passed
H.R. 2061 on December 6, 2001 by unanimous consent. On December
21, 2001, the President signed the bill into law as Public Law
107-93.
H.R. 2199--District of Columbia Police Coordination
Amendment Act of 2001. This bill amends the National Capital
Revitalization and Self-Government Improvement Act of 1997 to
permit any Federal law enforcement agency to enter into a
cooperative agreement with the Metropolitan Police Department
of the District of Columbia to assist the Department in
carrying out crime prevention and law enforcement activities in
the District of Columbia if deemed appropriate by the Chief of
the Metropolitan Police Department and the U.S. Attorney for
the District of Columbia. H.R. 2199 was introduced in the House
of Representatives on June 14, 2001, by Delegate Eleanor Holmes
Norton. The bill was referred to the House Committee on
Government Reform, and on June 19, 2001, referred to the
Subcommittee on District of Columbia. On June 26, 2001, the
Subcommittee on District of Columbia considered the bill, and
forwarded it to the full Committee on Government Reform by
unanimous consent. On July 25, 2001, the Committee on
Government Reform considered the bill and ordered it reported
(without written report). On September 25, 2001, H.R. 2199 was
considered by the House of Representatives under suspension of
the rules, and passed by voice vote. H.R. 2199 was received in
the Senate and referred to the Committee on Governmental
Affairs on September 25, 2001. On October 16, 2001, it was
referred to the Subcommittee, where it was favorably polled out
on November 7, 2001. H.R. 2199 was considered by the Committee
on Governmental Affairs on November 14, 2001, and ordered
reported by voice vote (S. Rept. 107-103). The Senate passed
H.R. 2199 by unanimous consent on December 11, 2001. On January
8, 2002, the President signed the bill into law as Public Law
107-113.
H.R. 2305--Criminal Justice Coordinating Council
Restructuring Act of 2002. This bill authorizes the heads of
six Federal agencies, specifically, the Court Services and
Offender Supervision Agency for the District of Columbia, the
District of Columbia Pretrial Services Agency, the U.S.
Attorney for the District of Columbia, the Federal Bureau of
Prisons, the U.S. Parole Commission, and the U.S. Marshals
Service, to meet regularly with District law enforcement
officials as the Criminal Justice Coordinating Council (CJCC).
H.R. 2305 strengthens the CJCC by authorizing Federal
participation and funds. It requires the CJCC to submit to the
President, Congress, and appropriate Federal and local agencies
an annual report detailing its activities. H.R. 2305 was
introduced on June 25, 2001 by Representative Connie Morella
and Delegate Eleanor Holmes Norton. It was referred to the
House Government Reform Subcommittee on the District of
Columbia on July 9, 2001. H.R. 2305 was amended in the House
subcommittee to address concerns raised by the Department of
Justice that requiring participation by the Federal entities
designated in the bill in this locally-constituted body could
be read to authorize the local agencies comprising a majority
of the CJCC to make decisions with binding authority on the
Federal agency participants. The amendment allayed the concern
by making clear that Federal agency involvement is merely
authorized, not required, thereby making clear that the bill
does not impose on the Federal agencies any obligation to
accede to CJCC decisions. H.R. 2305, as amended, was reported
to the full House Committee on Government Reform by voice vote
on September 21, 2001. On December 4, 2001, H.R. 2305, as
amended, was considered by the House of Representatives under
suspension of the rules, and passed by voice vote. H.R. 2305,
as passed in the House, was received in the Senate on December
5, 2001, and referred to the Committee on Governmental Affairs.
On December 17, 2001, the bill was referred to the
Subcommittee, where it was favorably polled out on March 14,
2002. H.R. 2305 was considered by the Committee on Governmental
Affairs on March 21, 2002, and ordered reported by voice vote
(S. Rept. 107-145). The Senate passed H.R. 2305 on May 7, 2002
by unanimous consent. On May 20, 2002, the President signed the
bill into law as Public Law 107-180.
Measures Referred to Subcommittee Upon Which Hearings Were Held
S. 1501--Safe Food Act of 2001. This bill would establish
in the Executive Branch an independent Food Safety
Administration to administer and enforce the food safety laws
for the protection of public health. It directs the
Administrator of Food Safety to oversee (1) implementation of
Federal food safety inspection, enforcement, and research
efforts, based on scientifically supportable assessments of
risks to public health; (2) development of consistent and
science-based standards for safe food; (3) coordination and
prioritization of food safety research and education programs
with other Federal agencies; (4) coordination of the Federal
response to food-borne illness outbreaks with other Federal
agencies and State agencies; and (5) integration of Federal
food safety activities with State and local agencies. The bill
would transfer to the Food Safety Administration all functions
of the following Federal agencies that relate to administration
or enforcement of the food safety laws, as determined by the
President: (1) the Food Safety and Inspection Service of the
Department of Agriculture; (2) the Center for Food Safety and
Applied Nutrition of the Food and Drug Administration (FDA);
(3) the Center for Veterinary Medicine of FDA; (4) the National
Marine Fisheries Service of the National Oceanic and
Atmospheric Administration of the Department of Commerce as it
relates to the Seafood Inspection Program; and (5) such others
as the President may designate by executive order. The bill was
introduced on October 4, 2001 by Senator Richard Durbin and
cosponsored by Senators Hillary Rodham Clinton, Barbara
Mikulski, and Robert Torricelli, and referred to the Committee
on Governmental Affairs. The bill was referred to the
Subcommittee on October 16, 2001. The Subcommittee conducted
two hearings related to S. 1501. The first hearing, ``Federal
Food Safety Oversight: Does the Fragmented Structure Really
Make Sense?'' was held on October 12, 2001, and the second
hearing, ``Kids in the Cafeteria: How Safe Are Federal School
Lunches?'' was held on April 30, 2002.
Measures Which Did Not Advance Beyond Referral to Subcommittee
S. 2316--District of Columbia Fiscal Integrity Act of 2002.
This bill gives the District of Columbia budget authority over
locally raised funds beginning October 1, 2003, while
continuing Congressional authority to appropriate Federal
payments to the District. The bill provides the District's
chief financial officer (CFO) with greater autonomy, including
procurement authority and control over personnel. Under the
bill, the CFO is charged with monitoring the District's
financial situation and directed to immediately notify Congress
and the Mayor about any problems that would warrant
reinstatement of a control board. The bill was introduced on
April 25, 2002 by Senator Mary Landrieu, and was referred to
Subcommittee on April 26, 2002.
S. 2866--District of Columbia Student Opportunity
Scholarship Act of 2002. This bill authorizes the establishment
of the District of Columbia Scholarship Corporation as a
private, nonprofit corporation to administer, publicize, and
evaluate a District scholarship program and determine
elementary and secondary student and school eligibility. It
establishes a District of Columbia Scholarship Fund, to be
administered by the Secretary of the Treasury. It provides for
a seven-member Corporation Board of Directors, with six members
appointed by the President from nominees submitted by the
Senate and the House of Representatives, and one member
appointed by the Mayor of the District of Columbia. The bill
authorizes the Corporation to award tuition scholarships and
enhanced achievement scholarships to District students in
kindergarten through grade 12 with family incomes not exceeding
185 percent of the national poverty line. Under the bill, these
scholarships could be used for tuition, fees, and appropriate
transportation to public, private, or independent schools (or
beyond-school-hours enhancement programs) in the District and
specified neighboring counties and cities in Maryland and
Virginia. The bill was introduced on August 8, 2002 by Senator
Judd Gregg, and cosponsored by Senators Sam Brownback, Larry
Craig, and Tim Hutchinson, and referred to the Senate Committee
on Governmental Affairs. The bill was referred to the
Subcommittee on August 30, 2002.
PERMANENT SUBCOMMITTEE ON INVESTIGTIONS
Chairman: Susan M. Collins
Ranking Minority Member: Carl Levin
The following is the annual Activities Report of the
Permanent Subcommittee on Investigations during the 107th
Congress:
I. Historical Background
A. Expansion of Jurisdiction
The Permanent Subcommittee on Investigations was originally
authorized by Senate Resolution 189 on January 28, 1948. At its
creation in 1948, the Subcommittee was part of the Committee on
Expenditures in the Executive Departments. The Subcommittee's
records and broad investigative jurisdiction over government
operations and national security issues, however, actually
antedate its creation, since it was given custody of the
jurisdiction of the former Special Committee to Investigate the
National Defense Program (the so-called ``War Investigating
Committee'' or ``Truman Committee''), chaired by Senator Harry
S Truman during the Second World War. Today, the Subcommittee
is part of the Committee on Governmental Affairs.\1\
---------------------------------------------------------------------------
\1\ In 1952, the parent committee's name was changed to the
Committee on Government Operations. It was changed again in early 1977,
to the Committee on Governmental Affairs, its present title.
---------------------------------------------------------------------------
The Subcommittee has had nine chairmen: Senators Homer
Ferguson of Michigan (1948), Clyde R. Hoey of North Carolina
(1949-1952), Joseph R. McCarthy of Wisconsin (1953-1954), John
L. McClellan of Arkansas (1955-1972), Henry M. Jackson of
Washington (1973-1978), Sam Nunn of Georgia (1979-1980 and
1987-1994), William V. Roth of Delaware (1981-1986 and 1995-
1996), Susan M. Collins of Maine (1997-2001); and Carl Levin of
Michigan (2001-2002).
Until 1957, the Subcommittee's jurisdiction focused
principally on waste, inefficiency, impropriety, and illegality
in government operations. Its jurisdiction has expanded
considerably since then, however, today encompassing
investigations within the broad ambit of the parent committee's
responsibility for matters relating to the efficiency and
economy of operations of all branches of the government,
including matters related to: (a) waste, fraud, abuse,
malfeasance, and unethical practices in government contracting
and operations; (b) criminality or improper practices in labor-
management relations; (c) organized criminal activities
affecting interstate or international commerce; (d) criminal
activity affecting the national health, welfare, or safety,
including investment fraud, commodity and securities fraud,
computer fraud, and use of offshore banking and corporate
facilities to carry out criminal objectives; (e) the
effectiveness of present national security methods, staffing
and procedures, and U.S. relationships with international
organizations concerned with national security; (f) energy
shortages, energy pricing, management of government-owned or
controlled energy supplies; and relationships with oil
producing and consuming countries; and (g) the operations and
management of Federal regulatory policies and programs. While
technically reduced to a subcommittee of a standing committee,
the Subcommittee has long exercised its authority as almost a
separate entity, selecting its own staff, issuing its own
subpoenas, and determining its own investigatory agenda.
The Subcommittee acquired this sweeping jurisdiction in
several successive stages. In 1957--based on information
developed by the Subcommittee--the Senate passed a Resolution
establishing a Select Committee on Improper Activities in the
Labor or Management Field. Chaired by Senator McClellan, who
also chaired the Subcommittee at that time, the Select
Committee was composed of eight Senators--four of whom were
drawn from the Subcommittee on Investigations and four from the
Committee on Labor and Public Welfare. The Select Committee
operated for 3 years, sharing office space, personnel, and
other facilities with the Permanent Subcommittee. Upon its
expiration in early 1960, the Select Committee's jurisdiction
and files were transferred to the Subcommittee on
Investigations, greatly enlarging the latter body's
investigative authority in the labor-management area.
The Subcommittee's jurisdiction expanded further during the
1960's and 1970's. In 1961, for example, it received authority
to make inquiries into matters pertaining to organized crime
and, in 1963, held the famous Valachi hearings described below,
examining the inner workings of the Italian Mafia. In 1967,
following a summer of riots and other civil disturbances, the
Senate approved a Resolution directing the Subcommittee to
investigate the causes of this disorder and to recommend
corrective action. In January 1973, the Subcommittee acquired
its national security mandate when it merged with the National
Security Subcommittee. With this merger, the Subcommittee's
jurisdiction was broadened to include inquiries concerning the
adequacy of national security staffing and procedures,
relations with international organizations, technology transfer
issues, and related matters. In 1974, in reaction to the
gasoline shortages precipitated by the Arab-Israeli war of
October 1973, the Subcommittee acquired jurisdiction to
investigate government operations involving the control and
management of energy resources and supplies.
In 1997, the full Committee on Governmental Affairs was
charged by the Senate to conduct a special examination into
illegal or improper activities in connection with Federal
election campaigns during the 1996 election cycle. The
Permanent Subcommittee provided substantial resources and
assistance to this investigation, contributing to a greater
public understanding of what happened, to subsequent criminal
and civil legal actions taken against wrongdoers, and to
enactment of campaign finance reforms in 2001.
B. Past Investigations
Armed with its broad jurisdictional mandate, the
Subcommittee has in recent years conducted investigations into
a wide variety of topics of public concern, ranging from child
pornography to espionage, including reviews of organized crime
activities such as labor racketeering, fraudulent insurance
plans, and newly emerging criminal groups. The Subcommittee has
also conducted investigations into numerous aspects of the
narcotics trade, including money laundering, issues in Federal
drug enforcement, and drug abuse. The Subcommittee has also
devoted itself to investigating allegations of waste, fraud,
and abuse in government programs and consumer protection
issues, addressing problems ranging from the safety of imported
foods to issues of Medicare fraud and mortgage ``flipping.''
Most recently, under Senator Levin's leadership, the
Subcommittee has focused on money laundering, factors
influencing the pricing of gasoline and crude oil, and the
collapse of Enron Corporation.
In 1998, the Subcommittee marked the 50th anniversary of
the Truman Committee's conversion into a permanent subcommittee
of the U.S. Senate.\2\ In the half-century of its existence,
the Subcommittee's many successes have made clear to the Senate
the importance of retaining a standing investigatory body
devoted to keeping government not only efficient and effective,
but also honest and accountable.
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\2\ This anniversary also marks the first date upon which internal
Subcommittee records generally began to become available to the public.
Unlike most standing committees of the Senate whose previously
unpublished records open after a period of 20 years has elapsed, the
Permanent Subcommittee on Investigations, as an investigatory body, may
close its records for 50 years to protect personal privacy and the
integrity of the investigatory process. With this 50th anniversary, the
Subcommittee's earliest records, housed in the Center for Legislative
Archives at the National Archives and Records Administration, began to
open seriatim. The records of the predecessor committee--the Truman
Committee--were opened by Senator Nunn in 1980.
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(1) Historical Highlights
The Subcommittee's investigatory record as a permanent
Senate body began under the chairmanship of Republican Senator
Homer Ferguson and his Chief Counsel (and future Attorney
General and Secretary of State) William P. Rogers, as the
Subcommittee inherited the Truman Committee's role in
investigating fraud and waste in U.S. Government operations.
This investigative work became particularly colorful under the
chairmanship of Senator Clyde Hoey, a North Carolina Democrat
who took the chair from Senator Ferguson after the 1948
elections. The last U.S. Senator to wear a long frock coat and
wing-tipped collar, Mr. Hoey was a distinguished southern
gentleman of the old school. Under his leadership, the
Subcommittee won national attention for its investigation of
the so-called ``five percenters,'' notorious Washington
lobbyists who charged their clients 5 percent of the profits
from any Federal contracts they obtained on the client's
behalf. Given the Subcommittee's jurisdictional inheritance
from the Truman Committee, it is perhaps ironic that the ``five
percenters'' investigation raised allegations of bribery and
influence-peddling that reached right into the White House and
implicated members of President Harry Truman's staff. In any
event, the fledgling Subcommittee was off to a rapid start.
What began colorful soon became contentious. When
Republicans returned to the Majority in the Senate in 1953,
Wisconsin's junior Senator, Joseph R. McCarthy, became the
Subcommittee's chairman. Two years earlier, as Ranking Minority
Member, Senator McCarthy had arranged for another Republican
Senator, Margaret Chase Smith of Maine, to be removed from the
Subcommittee. Senator Smith's offense, in Senator McCarthy's
eyes, was her issuance of a ``Declaration of Conscience''
repudiating those who made unfounded charges and used character
assassination against their political opponents. Although
Senator Smith had carefully declined to name any specific
offender, her remarks were universally recognized as criticism
of Senator McCarthy's accusations that communists had
infiltrated the State Department and other government agencies.
Senator McCarthy retaliated by engineering Senator Smith's
removal from the Subcommittee, replacing her with the newly-
elected Senator from California, Richard M. Nixon.
Upon becoming Subcommittee Chairman, Senator McCarthy
staged a series of highly publicized anti-communist
investigations, culminating in an inquiry into communism within
the U.S. Army, which became known as the Army-McCarthy
hearings. During the latter portion of these hearings, in which
the parent Committee examined the Wisconsin Senator's attacks
on the army, Senator McCarthy recused himself, leaving South
Dakota Senator Karl Mundt to serve as Acting Chairman of the
Subcommittee. Gavel-to-gavel television coverage of the
hearings helped turn the tide against Senator McCarthy by
raising public concern about his treatment of witnesses and
cavalier use of evidence. In December 1954, in fact, the Senate
censured Senator McCarthy for unbecoming conduct; in the
following year, the Subcommittee adopted new rules of procedure
that better protected the rights of witnesses. The Subcommittee
also strengthened the rules ensuring the right of both parties
on the Subcommittee to appoint staff, initiate and approve
investigations, and review all information in the
Subcommittee's possession.
In 1955, Senator John McClellan of Arkansas began 18 years
of service as Chairman of the Permanent Subcommittee on
Investigations. Senator McClellan appointed the young Robert F.
Kennedy as the Subcommittee's Chief Counsel. That same year,
Members of the Subcommittee were joined by Members of the
Senate Labor and Public Welfare Committee on a special
committee to investigate labor racketeering. Chaired by Senator
McClellan and staffed by Kennedy and other Subcommittee staff
members, this special committee directed much of its attention
to criminal influence over the Teamsters Union, most famously
calling Teamsters' leaders Dave Beck and Jimmy Hoffa to
testify. The televised hearings of the special committee also
introduced Senators Barry Goldwater and John F. Kennedy to the
Nation, as well as leading to passage of the Landrum-Griffin
Labor Act.
After the special committee completed its work, the
Permanent Subcommittee on Investigations continued to
investigate organized crime. In 1962, the Subcommittee held
hearings during which Joseph Valachi outlined the activities of
La Cosa Nostra, or the Mafia. Former Subcommittee staffer
Robert Kennedy--who had by now become Attorney General in his
brother's Administration--used this information to prosecute
prominent mob leaders and their accomplices. The Subcommittee's
investigations also led to passage of major legislation against
organized crime, most notably the Racketeer Influenced and
Corrupt Organizations (RICO) provision of the Crime Control Act
of 1970. Under Chairman McClellan, the Subcommittee also
investigated fraud in the purchase of military uniforms,
corruption in the Department of Agriculture's grain storage
program, securities fraud, and civil disorders and acts of
terrorism. From 1962 to 1970, the Permanent Subcommittee on
Investigations conducted an extensive probe of political
interference in the awarding of government contracts for the
Pentagon's ill-fated TFX (``tactical fighter, experimental'').
In 1968, the Subcommittee also examined charges of corruption
in U.S. servicemen's clubs in Vietnam and elsewhere around the
world.
In 1973, Senator Henry ``Scoop'' Jackson, a Democrat from
Washington, replaced Senator McClellan as the Subcommittee's
chairman. During these years, recalled Chief Clerk Ruth Young
Watt--who served in this position from the Subcommittee's
founding until her retirement in 1979--Ranking Minority Member
Charles Percy, an Illinois Republican, was more active on the
Subcommittee than Chairman Jackson, who was often distracted by
his Chairmanship of the Interior Committee and his active role
on the Armed Services Committee.\3\ Senator Percy worked
closely in this regard with Georgia Democrat Sam Nunn, who
subsequently succeeded Senator Jackson as Chairman in 1979. As
Chairman, Senator Nunn continued the Subcommittee's
investigations into the role of organized crime in labor-
management relations and also investigated pension frauds.
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\3\ It had not been uncommon in the Subcommittee's history for the
Chairman and Ranking Minority Member to work together closely despite
their partisan differences, but Senator Percy was unusually active in
the Minority--a role that included chairing one investigation of the
hearing aid industry.
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The regular reversals of political fortunes in the Senate
of the 1980's and 1990's saw Senator Nunn trade chairmanship
three times with Delaware Republican William Roth. Senator Nunn
served from 1979 to 1980 and again from 1987 to 1995, while
Senator Roth served from 1981 to 1986, and again from 1995 to
1996. These 15 years saw a strengthening of the Subcommittee's
bipartisan tradition in which investigations were initiated by
either the Majority or Minority and fully supported by the
entire Subcommittee. For his part, Senator Roth led a wide
range of investigations into commodity investment fraud, off-
shore banking schemes, money laundering, and child pornography.
Senator Nunn led inquiries into Federal drug policy, the global
spread of chemical and biological weapons, abuses in Federal
student aid programs, computer security, airline safety, and
health care fraud. Senator Nunn also appointed the
Subcommittee's first female counsel, Eleanore Hill, who served
as Chief Counsel to the Minority from 1982 to 1986 and then as
Chief Counsel from 1987 to 1995. Ms. Hill subsequently served
as Inspector General at the Department of Defense.
(2) Recent Investigations
In January 1997, Republican Senator Susan Collins of Maine,
became the first woman to chair the Permanent Subcommittee on
Investigations. Senator John Glenn of Ohio became the Ranking
Minority Member. After Senator Glenn's retirement, Michigan
Democrat Carl Levin succeeded him in January 1999, as the
Ranking Minority Member. During Senator Collins' chairmanship,
the Subcommittee conducted a number of investigations affecting
Americans in their day-to-day lives, including investigations
into mortgage fraud, phony credentials obtained through the
internet, deceptive mailings and sweepstakes promotions, day
trading of securities, and securities fraud on the internet.
Senator Levin, while Ranking Minority Member, initiated an
investigation into money laundering, and in 1999, the
Subcommittee held a hearing on money laundering issues
affecting private banking. Senator Collins continued to chair
the Subcommittee until June 2001, when the Senate Majority
party changed hands, and Senator Levin assumed the
chairmanship. Senator Collins, in turn, became the Ranking
Minority Member.
During the 107th Congress, then, both Senator Collins and
Senator Levin chaired the Subcommittee. In her 6 months
chairing the Subcommittee at the start of the 107th Congress,
Senator Collins held hearings examining issues related to cross
border fraud, the improper operation of tissue banks, and
Federal programs designed to fight diabetes. During the
following 18 months, Senator Levin led a bipartisan
Subcommittee investigation of the Enron Corporation, which had
collapsed into bankruptcy just before Senator Levin became the
Chairman. Senator Levin also advanced the investigation he had
initiated while Ranking Minority Member into issues related to
money laundering and opened new investigations into offshore
tax havens and tax scams, border security, and the pricing of
gasoline and other fuels. The following pages describe the
Subcommittee's work during the 107th Congress.
II. Subcommittee Hearings During the 107th Congress
A. Role of U.S. Correspondent Banking in International Money Laundering
(March 1, 2, and 6, 2001)
The first hearings held by the Subcommittee during the
107th Congress presented evidence of serious money laundering
problems affecting a category of banking services called
correspondent banking. Correspondent banking occurs when one
bank provides services to another bank to move funds or carry
out other financial transactions. It is an essential feature of
international banking, allowing the rapid movement of funds
across borders among banks to enable the banks and their
clients to conduct business worldwide.
The Subcommittee's year-long investigation found that too
many U.S. banks, through the correspondent accounts they
provide to foreign banks carrying high risks of money
laundering, had become conduits for illicit funds associated
with drug trafficking, financial fraud, Internet gambling, and
other crimes. The investigation identified three categories of
foreign banks with high risks of money laundering: Shell banks,
offshore banks, and banks in jurisdictions with weak anti-money
laundering controls. The investigation found that, because many
U.S. banks had routinely failed to screen and monitor these
high-risk foreign banks as clients, they were exposed to poorly
regulated, poorly managed, sometimes corrupt, foreign banks
with weak or no anti-money laundering controls. The
investigation determined that U.S. correspondent accounts had
been used by these foreign banks, their owners and criminal
clients to gain direct access to the U.S. financial system, to
benefit from the safety and soundness of the U.S. banking
system, and to launder dirty money through U.S. bank accounts.
In February 2001, Senator Levin released a 450-page report
prepared by his staff detailing the money laundering problems
uncovered in correspondent banking. The report indicated that
virtually every U.S. bank examined had opened correspondent
accounts for high-risk foreign banks. The report also presented
ten detailed case histories showing how high-risk foreign banks
managed to move billions of dollars through U.S. banks,
including hundreds of millions of dollars in illicit funds
associated with drug trafficking, financial fraud, or Internet
gambling. In some cases, the foreign banks were engaged in
criminal behavior; in others, the foreign banks had such poor
anti-money laundering controls that they did not know or
appeared not to care whether their clients were engaged in
criminal behavior. Several of the foreign banks operated well
outside the parameters of normal banking practices, without
basic fiscal or administrative controls, account opening
procedures or anti-money laundering safeguards. All had limited
resources and staff and relied heavily upon their U.S.
correspondent accounts to conduct operations, provide client
services, and move funds. Most completed virtually all of their
transactions through their correspondent accounts, making
correspondent banking integral to their operations. The result
was that their U.S. correspondent accounts served as a
significant gateway into the U.S. financial system for
criminals and money launderers.
In March, the Subcommittee held 3 days of hearings
examining the problem of international correspondent banking
and money laundering from several perspectives. The first
witness was a former offshore bank owner, John Mathewson, who
pled guilty to conspiracy to commit money laundering and tax
evasion and has spent recent years helping to prosecute his
former clients for tax evasion and other crimes. Mr. Mathewson
testified that 95 percent of his 2,000 clients had been U.S.
citizens, and he believed that 100 percent of his bank clients
were engaged in tax evasion. He characterized his offshore bank
as a ``run-of-the-mill'' operation. He also said that the
Achilles' heel of the offshore banking community was its
dependence upon correspondent banks to do business and that was
how jurisdictions like the United States could take control of
the situation and stop abuses, if the United States had the
political will to do so.
The March hearings also heard from correspondent bank
officers and their supervisors at three major U.S. banks, Bank
of America, Chase Manhattan Bank, and Citibank. The witnesses
were James C. Christie, Senior Vice President, Global Treasury
Risk Management, at Bank of America; David Weisbrod, Senior
Vice President, Treasury Services Division, at Chase Manhattan
Bank; and several officers from Citibank, including Jorge
Bermudez, Executive Vice President, Head of e-Business, at
Citibank in New York, Carlos Fedrigotti, Executive Vice
President and Country Corporate Officer at Citibank Argentina,
and Martin Lopez, (formerly with Citibank Argentina), Vice
President and Corporate Bank Head, at Citibank South Africa.
The hearings showed how each of these U.S. banks opened
accounts for high-risk foreign banks, despite significant money
laundering risks and even after being confronted with
disturbing evidence of misconduct or suspicious transactions.
The hearings also heard testimony from correspondent
banking and money laundering experts: Jack Blum of the Lobel,
Novins and Lamont law firm; Anne Vitale, former Managing
Director and Deputy General Counsel at Republic National Bank
of New York, and Robb Evans, former head of the California
banking association and currently with Robb Evans and
Associates, regarding the need for U.S. banks to maintain
strong anti-money laundering controls in their correspondent
banking operations. Another witness, Arthur Jacques of the
Jacques Little law firm in Toronto, Ontario, Canada, spoke on
behalf of some of the victims of money laundering through
correspondent accounts, including one case in which 700,000
credit cardholders who were defrauded of more than $40 million
in illegal credit card charges by a criminal who sent the
stolen funds to offshore banks with accounts at U.S. banks.
Finally, the hearings heard from Federal law enforcement,
including Joseph Myers, Acting Deputy Assistant Secretary for
Enforcement Policy at the U.S. Department of the Treasury; and
Mary Lee Warren, Deputy Assistant Attorney General for the
Criminal Division at the U.S. Department of Justice. These
witnesses testified about lessons learned from past money
laundering cases that utilized correspondent banking and
existing problems with U.S. anti-money laundering laws that
impeded successful money laundering prosecutions.
After the hearing, most of the high-risk foreign banks
highlighted in the staff report were closed by their sponsoring
jurisdictions, and many U.S. banks announced efforts to
strengthen their anti-money laundering efforts in the
correspondent banking field. The hearings and staff report also
contributed to the enactment of stronger anti-money laundering
provisions in Title III of the USA Patriot Act, which was
signed into law in October 2001. Among other measures, the USA
Patriot Act bars U.S. financial institutions from opening
accounts for foreign shell banks and requires them to use
enhanced due diligence before opening correspondent accounts
for offshore banks or banks in jurisdictions that fail to
cooperate with international anti-money laundering efforts. The
USA Patriot Act also makes foreign corruption a predicate
offense for U.S. money laundering prosecutions and requires
U.S. financial institutions to use enhanced due diligence
before opening a private banking account for a political figure
or their close family members. A number of the Subcommittee's
key recommendations were also incorporated in the leading
international guidelines to prevent money laundering called the
40 Recommendations, which are issued by the Financial Action
Task Force on Money Laundering in the Organization for Economic
Cooperation and Development, were revised in 2003, and have
been used by the United States to evaluate foreign countries'
anti-money laundering laws and practices.
B. Tissue Banks: Is the Federal Government's Oversight Adequate? (May
24, 2001)
On May 24, 2001, the Subcommittee held a hearing examining
the practices of the human tissue industry and the adequacy of
the regulatory framework that governs the industry. The
recovery and medical use of tissue, including skin, bone,
cartilage, tendons, and ligaments are increasingly common and
can play an essential role in improving the quality of
recipients' lives through transplantation.
Tissue banks procure, process, store, and distribute human
tissue for transplantation. Tissue transplants have soared in
recent years due to advances in technology that have greatly
reduced the risk of rejection. In 1994, an estimated 6,000
individuals donated tissue. By 1999, however, this figure had
increased three-fold to approximately 20,000. Donors now make
possible as many as 800,000 tissue transplants every year in
the United States. Nevertheless, the industry that carries out
these tasks has received little public scrutiny. The
organizations that make up the tissue industry are collectively
referred to as tissue banks. Some are engaged in tissue
recovery, while others process, store, and distribute human
tissue.
While most people are familiar with the concept of organ
donation, tissue donation is not as well understood. Human
tissue is unlike an organ transplant because it is not usually
transplanted ``as-is'' from the donor's body into that of the
recipient. Rather, donated tissue generally undergoes
considerable processing before it is transplanted into a
patient. The reconfigured tissues are also known as
``allografts.''
Once it is processed, donated tissue can be stored for a
period of time before it is used to enhance, improve, and even
save lives. If, however, human tissue is not properly
processed, it can pose dangerous risks to the recipient.
Therefore, it is critical that the tissue come from carefully
screened donors and that it be properly processed and stored.
It is equally important to ensure that persons and organization
involved in the tissue industry follow good tissue handling and
processing practices in order to prevent contamination, and
that the industry employ sound tracking procedures so that if a
problem develops, all of the affected tissue recipients can be
promptly notified.
With the phenomenal growth and new uses for tissue
transplants have come some problems. Incidents have been
brought to light in which tissue obtained from unsuitable
donors entered the American tissue supply, raising questions
about the adequacy of Federal regulation. Other concerns were
raised about whether the practices of some tissue banks are
sufficient to reduce the danger of spreading such illnesses as
the human variant of ``mad cow disease.''
The Food and Drug Administration (FDA) has been aware of
the public health risks. In 1997, the agency examined the
health issues involving tissue transplantation and concluded
that the existing regulatory framework was insufficient. The
review was undertaken in response to incidents in which
imported foreign tissue had tested positive for serious
diseases. The agency then notified the industry that it
intended to make regulatory changes to strengthen the oversight
of tissue banks. The changes were to be threefold: First, all
tissue establishments would be required to register with the
FDA; second, screening of potential donors would be expanded to
require testing for the human variant of mad cow disease,
syphilis, and other viruses; and third, a rule would be issued
on the methods and controls used during the processing of human
tissue.
The hearing exposed dangerous practices of some tissue
banks as well as the inadequacy of the regulatory framework.
The Subcommittee heard testimony from the following witnesses:
George F. Grob, Deputy Inspector General for Evaluation and
Inspections, Office of the Inspector General, U.S. Department
of Health and Human Services; P. Robert Rigney, Jr., Chief
Executive Officer, American Association of Tissue Banks;
William F. Minogue, M.D., Chairman of the Board of Directors,
Washington Regional Transplant Consortium; Valerie J. Rao,
M.D., Chief Medical Examiner, District Five, Leesburg, Florida;
and Kathryn C. Zoon, Ph.D, Director, Center for Biologics
Evaluation and Research, U.S. Food and Drug Administration.
The testimony was deeply troubling. The Federal Government
had no idea how many tissue banks were operating in the
country. Prior to the hearing, the FDA estimated that there
about 150, but approximately 350 tissue banks registered with
the FDA when the registration requirement went into effect.
That indicated that many tissue banks were operating with no
Federal oversight whatsoever.
There was also considerable testimony about the
unacceptable practices of some tissue banks. For example,
George F. Grob, Deputy Inspector General from the Department of
Health and Human Services, testified about unscrupulous tissue
banks that engaged in a practice in which tissues that
initially tested positive for contamination were simply tested
over and over again until the technicians achieved the negative
result they wanted. Dr. William Minogue from the Washington
Regional Transplant Consortium, testified that a Lions Eye
Bank, which also participated in tissue recovery, accepted a
donor who was 82 years old with a history of cancer.
At the end of the hearing, Senator Collins concluded that
the Federal Government's oversight was not adequate and that
until the necessary resources were devoted to tissue oversight,
``there are still going to be holes in the safety net of
regulations.''
C. Cross-Border Fraud: Scams Know No Boundaries (June 14 and 15, 2001)
Under Senator Collins' chairmanship, the Subcommittee
conducted a 5-month investigation into the growing number of
incidents of fraud directed at American consumers that
originate in other countries. This emerging crime, known as
cross-border fraud, takes many forms including foreign
lotteries and fraudulent sweepstakes. As Senator Collins noted
at the hearings, ``Foreign countries, and particularly Canada
have, unfortunately, become major points of origin for lottery,
sweepstakes and advance-fee-for-loan schemes that prey upon
Americans, especially the elderly.'' Such criminals work
principally through direct mail and telemarketing, commonly
seeking to convince their victims that they have won millions
of dollars in a lottery--but that this award can be collected
only if the victims first pay certain ``attorneys fees'' or
``back taxes'' on the sum. It is estimated that cross-border
fraud costs American consumers millions of dollars every year.
The Subcommittee's investigation culminated in 2 days of
hearings.
On the first day of hearings, the Subcommittee heard
testimony from three senior citizens--Ann Hersom of Maine,
Bruce Hathaway of Ohio and Julia Erb of Michigan--who were
victims of cross-border scams. The victims had each lost
thousands of dollars, and in one case, tens of thousands of
dollars to devious telemarketers and clever mail solicitations.
Mrs. Hersom, for example, testified that her 80-year-old
husband, formerly a successful businessman, had fallen prey to
the tactics of cross-border con artists. She estimated that he
lost $20,000 to these schemes, and she described how
devastating these losses had been to their family. The
fraudulent pitchmen did not give up following the hearing, and
have continued to send solicitations from illegal Canadian and
Australian lotteries, as well as place numerous telemarketing
calls each day.
The second witness panel was comprised of three U.S. and
Canadian law enforcement officials who placed the problem of
cross-border fraud in perspective by describing the sweeping
reach and the high volume and the growing number of cross-
border frauds, and described their agencies' efforts to combat
these crimes. Detective Staff Sergeant Barry F. Elliot, Ontario
Provincial Police of Ontario, Canada testified about an
initiative called Phonebusters. The mandate of Phonebusters is
to prosecute those involved in telemarketing fraud in Ontario
and Quebec, and to facilitate prosecution by U.S. agencies
through extradition, and under Canada's Competition Act. The
Phonebuster's initiative highlights both the importance of
international information sharing and of aggressive consumer
education and awareness campaigns in combating cross-border
fraud. Jackie DeGenova, Chief for Consumer Protection, Ohio
Attorney General's Office explained the impact of cross-border
fraud on Ohio residents from the perspective of a prosecutor
who has a longstanding and effective working relationship with
her Canadian counterparts.
The Subcommittee also heard testimony from Lawrence E.
Maxwell, Postal Inspector in Charge, Fraud, Child Exploitation,
and Asset Forfeiture Division, U.S. Postal Inspection Service
who discussed efforts aimed at stemming the flow of fraudulent
solicitations and efforts made to educate the American
consumer. Mr. Maxwell also testified about the U.S. Postal
Inspection Service's work with its Canadian counterpart, Canada
Post. Reiterating the need for cooperation, Senator Collins
stated at the hearing, ``Clearly, it is important that U.S. and
Canadian law enforcement authorities work together more closely
in fighting cross-border fraud.''
On the second day of hearings, the Subcommittee heard
testimony from one panel of three witnesses. The Honorable
William H. Sorrell, Attorney General of Vermont addressed the
difficulties of fighting fraud across borders, noting the slow
pace of extraditions under the Mutual Legal Assistance Treaty,
the costs associated with witness travel, and also with hiring
Canadian lawyers. Mary Ellen Warlow, Acting Deputy Assistant
Attorney General, Criminal Division, U.S. Department of Justice
discussed the number of telemarketing operations in Canada, and
the success of joint U.S.-Canada working groups to combat
cross-border fraud.
The third witness, Hugh Stevenson, Associate Director,
Planning and Information, Consumer Protection Bureau, Federal
Trade Commission, testified about the importance of gathering
information and sharing with appropriate U.S. and foreign law
enforcement agencies on cross-border scams, and the
difficulties of chasing money across borders. The FTC
representative also testified about the need to make civil
remedies more effective across borders.
Senator Levin acknowledged the difficulties that law
enforcement faces when chasing criminals across borders, noting
that ``Telemarketers from Canada and other countries prey on
elderly Americans causing significant financial loss and
emotional distress. It is difficult for U.S. law enforcement
agencies to respond across international lines and these
criminals take advantage of that fact.''
D. Diabetes: Is Sufficient Funding Being Allocated To Fight This
Disease? (June 26, 2001)
Diabetes is the leading cause of kidney failure, blindness
in adults and amputations not related to injury. Diabetes costs
more than $105 billion annually in the United States in health-
related expenditures. In fact, more than 1 out of every 10
dollars spent on health care, and about 1 out of every 4
Medicare dollars, are spent to treat people with diabetes. The
hearing was held to examine the impact that juvenile diabetes
has had on children and their families
The burden of diabetes falls particularly heavily on
children and young adults with type 1, or juvenile diabetes.
Juvenile diabetes is the second most common chronic disease
affecting children--and is one that children do not outgrow.
Senator Collins noted at the hearing, ``I will never forget the
words of a little boy who told me that his greatest wish was
that, just once, he could take a day off from diabetes. Despite
the fact that it might be his birthday or Christmas, or another
important holiday, he could never take a day off from his
disease.''
In addition to gaining insight into the impact of diabetes
on children's lives, the hearing was intended to highlight
advances in the quest for a cure and the need for additional
research. Senator Levin noted at the hearing, ``Research that
is done for type 1 . . . can also help the even larger number
of people who have type 2 diabetes. One of the most important
aspects of diabetes research is embryonic stem cell research.''
The first witness to testify was Mary Tyler Moore, who
serves as the International Chairman of the Juvenile Diabetes
Research Foundation, and who thanked Congress for increasing
funding for diabetes research, testified about recent advances
in diabetes research, and urged support for embryonic stem cell
research. The Subcommittee also heard testimony from Kevin
Kline, a Juvenile Diabetes Research Foundation board member and
actor, who highlighted the fears of parents whose children
suffer from diabetes. The third witness, actor Jonathan
Lipnicki, testified on behalf of a friend, Tessa Wick, about
her struggle with diabetes. Ms. Wick also urged support for
embryonic stem cell research. Finally, the Subcommittee heard
testimony by Captain James Lovell, a former NASA Astronaut,
whose adult son was diagnosed with diabetes. Captain Lovell
testified on the need to fund research opportunities that have
not been pursued for lack of funding, and on the economic
impact of diabetes on this country.
The second panel included two researchers, Allen M.
Spiegel, M.D., who serves as Director of the National Institute
of Diabetes and Digestive and Kidney Diseases, National
Institutes of Health, and Hugh Auchincloss, Jr., M.D.,
Professor of Surgery, Massachusetts General Hospital and
Harvard Medical School. Dr. Spiegel explained what is currently
known about diabetes' progression, and the scientific
community's goals such as identifying the causes of diabetes,
preventing the disease, reducing complications, and most
importantly, finding a cure. Dr. Auchincloss discussed some
promising advances in diabetes research carried out in
Edmonton, Canada, involving cell transplantation. He then
enumerated the work that remains to be done in this area before
such research can have wide application, and explained what is
entailed in embryonic stem cell research.
The panel also included James Robbins, President and CEO of
Cox Communications, whose daughter has diabetes, and Greg
Brenneman, former Chief Operating Officer of Continental
Airlines, whose son has diabetes. Mr. Robbins testified about
the impact diabetes has had on his daughter and his family as a
whole. He also testified from a business perspective about the
financial sense it makes to fund the Juvenile Diabetes Research
Foundation. Mr. Brenneman testified about the impact diabetes
had on his young son and on his family. Mr. Brenneman testified
that he had promised his son that he would help him find a cure
for diabetes, and asked Congress to help him fulfill his
promise to his son.
The third panel of witnesses was made up of delegates to
the Juvenile Diabetes Research Fund Children's Congress, and
included Rachel Dudley, age 15 of Michigan; Andrew Webber, age
13 of Maine; Eliza Jayne Kiley, age 5 of Pennsylvania,
accompanied by her mother Michele Kiley; Daniel Thaller, age 12
of North Carolina, accompanied by Jessica Thaller, age 13; and
Caroline Rowley, age 11 of Texas. These witnesses discussed the
impact diabetes has had on their daily lives, and on their
aspirations for the future. They also urged Congress to
continue funding diabetes research.
E. What is the U.S. Position on Offshore Tax Havens? (July 18, 2001)
On July 18, 2001, under the chairmanship of Senator Levin,
the Subcommittee held a hearing examining U.S. efforts to
obtain information from offshore tax havens and the U.S.
position regarding an ongoing project sponsored by the
Organization of Economic Cooperation and Development (OECD), of
which the United States is a member, to convince offshore tax
havens to cooperate with inquiries made by OECD countries to
detect, stop and prosecute tax evasion.
Offshore jurisdictions typically are countries that allow
corporations, trusts, or other businesses to be established
within their territory on the condition that any business they
conduct is only with persons who are ``offshore,'' meaning
persons who are not citizens or domestic businesses operating
inside the country. Offshore jurisdictions charge hefty fees
for establishing and maintaining an offshore business, though
they often charge little-to-no taxes. The offshore businesses
are often shell operations established by attorneys, trust
companies, or banks within the offshore jurisdiction operating
under corporate secrecy laws that make it difficult to learn
the true owner of a business. These offshore businesses also
usually open accounts at banks licensed by the offshore
jurisdiction and conduct financial transactions under bank
secrecy laws that make it difficult to trace transactions or
identify bank account owners. The money deposited in these
banks is usually held, though, in correspondent accounts that
the banks have opened at larger banks in the United States or
other countries. Many of the offshore corporations and trusts
serve as mere place holders for individuals who want to hide
their identity and activities.
Because many offshore jurisdictions have combined bank and
corporate secrecy laws with weak bank regulation and anti-money
laundering controls, they have become notorious for offshore
operations engaged in money laundering, tax evasion, or other
crimes. Numerous Subcommittee hearings over the years have
examined these problems in offshore jurisdictions, the damage
they cause to U.S. interests, and what can be done about them.
The July hearing focused on the ongoing resistance of many
offshore jurisdictions to divulging information needed to
detect, stop, and prosecute tax evasion. For decades, the
United States has been working with other countries, on a
bilateral and multilateral basis, to improve the ability of
U.S. tax officials to obtain information needed to enforce U.S.
tax laws and stop tax evasion. Currently, the U.S. has a
network of over 70 tax treaties and information exchange
agreements with countries around the globe. But U.S.
enforcement efforts have frequently been stymied by offshore
tax havens refusing to release information about nonresidents
operating under bank and corporate secrecy laws, resulting in
an estimated U.S. revenue loss of $70 billion each year. U.S.
allies have experienced similar problems. In response, with
strong U.S. support, the OECD initiated, in 1998, a
multilateral project which sought to identify uncooperative tax
havens and convince them to change their ways.
In June 2000, the OECD issued a report which identified 35
countries as potentially ``uncooperative tax havens'' and
stated that OECD members would take ``defensive measures''
against them unless, by July 2001, the listed countries had
made written commitments to improving their cooperation with
international tax enforcement efforts. Early in 2001, after his
appointment to office, Secretary of the Treasury Paul O'Neill
announced an internal review of the OECD project after
expressing ``serious concerns'' about its direction. Secretary
O'Neill later called for a ``refocused'' project, centered on
``its core element: the need for countries to be able to obtain
specific information from other countries upon request in order
to enforce their respective tax laws.'' In June 2001, after the
OECD agreed to certain revisions in the project to satisfy U.S.
concerns, press reports indicated that the United States had
renewed its support for the OECD project, while critics
continued to oppose the project and some claimed the United
States still opposed it.
The July hearing examined the historic and ongoing lack of
cooperation by some offshore jurisdictions with U.S. tax
enforcement efforts and sought to clear up any confusion about
U.S. support for the revised OECD tax haven project. Four
witnesses testified about the ongoing failure of some tax
havens, despite years of effort by the United States, to
cooperate with U.S. tax enforcement efforts. These witnesses
were the Honorable Robert M. Morgenthau, Manhattan District
Attorney for New York; the Honorable Michael Chertoff,
Assistant Attorney General for the Criminal Division, U.S.
Department of Justice; and two former IRS Commissioners, the
Honorable Sheldon Cohen, who served under President Johnson,
and the Honorable Donald Alexander, who served under President
Ford.
Secretary O'Neill testified that he was firmly committed to
taking forceful action to detect and stop tax evasion through
tax havens. He testified that the United States supports the
revised OECD tax haven project, the United States is prepared
to impose sanctions on uncooperative tax havens that refuse to
share information needed to enforce our tax laws, and the
Treasury Department would support legislation to enable the
United States to impose tax haven sanctions, if necessary.
Secretary O'Neill also pledged to undertake a major effort to
negotiate, within 1 year, bilateral tax treaties with certain
tax havens that have historically resisted exchanging
information with the United States to support U.S. tax
enforcement. In July 2002, Secretary O'Neill informed the
Subcommittee that he was able to negotiate ground-breaking
treaties with several of these tax havens, including the Cayman
Islands, British Virgin Islands, and Jersey.
F. Review of INS Policy on Releasing Illegal Aliens Pending Deportation
(November 13, 2001)
On November 13, 2001, the Subcommittee held a hearing and
took testimony from current and past U.S. Border Patrol
employees about a troubling practice in which many persons
arrested for attempted illegal entry into the United States in
areas outside the normal ports of entry were released by the
Border Patrol and the Immigration and Naturalization Service
(INS) without bond and were allowed to move freely within the
United States under no constraint other than a written
instruction to appear at a hearing often scheduled months
later.
The U.S. Border Patrol, which serves as the uniformed law
enforcement arm of the INS, is responsible for combating
illegal entries into the United States at points other than
ports of entry. Ports of entry, the only places where persons
may legally enter the United States, are typically located at
airports, bridges, and highways, and include facilities
enabling INS officers and Customs agents to inspect persons,
papers, and luggage. The hearing's focus was on persons
arrested while trying to cross into the United States without
subjecting themselves to inspection at a port of entry as
required by law.
The hearing presented evidence indicating that the majority
of people who are arrested for attempted illegal entry into the
United States and do not voluntarily return to their country,
are released on their own recognizance, are allowed to move
around the United States at will, do not appear at their
removal hearing, and are rarely located or removed from the
United States. Statistics for the Detroit Sector in Fiscal Year
2001, for example, showed that the Border Patrol had arrested
2,106 people, a significant percentage of whom were arrested
while attempting to enter the country illegally. Of those
2,106, slightly less than two-thirds voluntarily returned to
their country of origin, while 773 were issued notices to
appear at a removal hearing. Of the 773, 595 or more than 75
percent were then released by the Border Patrol and INS on
their own recognizance, without bond and many without
undergoing a criminal background check, and allowed to move
freely within the United States until the time of their
hearing. While the INS did not keep statistics on how many of
the 595 later appeared at the specified hearing, related
statistics and estimates by former Border Patrol officials
indicate that the percentage of arrested persons who were
released without bond and did not appear at their hearing was
at least 40 percent and possibly as high as 90 percent.
The Subcommittee heard from two panels of witnesses
consisting of INS and Border Patrol management, and Border
Patrol officers on the front lines in two different sectors of
the Border Patrol: The Detroit Sector which covers four
States--Michigan, Ohio, Indiana and Illinois--and the Blaine
Sector which covers Alaska, Oregon and the western half of the
State of Washington. The first panel of witnesses included
senior officials from the Border Patrol and INS: Michael
Pearson, Executive Associate Commissioner for Field Operations,
INS, accompanied by Gustavo DeLaVina, Chief, U.S. Border
Patrol. The second panel included three current or former
Border Patrol officers: Mark Hall, President, Local 2499,
National Border Patrol Council, and Senior Border Patrol Agent,
U.S. Border Patrol in Detroit, Michigan; Keith Olson,
President, Local 2913, National Border Patrol Council and
Senior Border Patrol Agent, U.S. Border Patrol in Bellingham,
Washington; and Eugene Davis, Retired Deputy Chief Patrol
Agent, Blaine Sector, U.S. Border Patrol in Blaine, Washington.
The witnesses testified about the practice at issue, its
justification, and the attendant security risks for the United
States.
At the hearing, Senator Levin asked the Border Patrol and
INS to report on the steps they planned to take to close the
identified enforcement loophole. The INS subsequently issued a
memorandum requiring a criminal background check to be
conducted on all arrested aliens prior to releasing them on
bond or their own recognizance, but otherwise declined to
change the procedures for handling persons who are arrested for
attempted illegal entry into the United States and who decline
to return to their country of origin. To further address the
enforcement problem identified in the Subcommittee hearing,
Senator Levin added two provisions to the Enhanced Border
Security and Visa Entry Reform Act, which was enacted into law
in 2003, to strengthen U.S. border controls. One of these
provisions requires the U.S. Department of Justice to provide
Congress with an annual report on the number of aliens arrested
outside ports of entry who were served a notice to appear for a
removal hearing, were released on recognizance, and then failed
to attend their removal hearing. This data was requested to
obtain additional information on the scope of the enforcement
problem. The second Levin provision increased training
opportunities for Border Patrol agents.
G. Gas Prices: How Are They Really Set? (April 30 and May 2, 2002)
In June 2001, due to concerns about gasoline price
volatility, the suddenness with which gasoline prices can rise,
a pattern of local gasoline prices rising and falling in
tandem, and the importance of reasonably priced gasoline to the
U.S. economy, Senator Levin initiated an in-depth Subcommittee
investigation into the factors behind the pricing of retail
gasoline. In April 2002, the Subcommittee issued a 400-page
staff report and, in April and May, held hearings detailing how
U.S. retail gasoline prices are set. The report showed how oil
industry mergers, refinery closings, and increasingly ``tight''
gasoline supplies had increased market concentration and given
some refiners sufficient market power to reduce gasoline
supplies and increase gasoline prices. Other factors leading to
higher prices and spikes in the Midwest included regional
pipeline limitations, price variations from different fuels,
and the practice of ``parallel pricing'' in which retailers
looked to competitors to set gasoline prices.
The hearings, which took place over 2 days, took testimony
from top executives at five major oil companies, State
regulators, and experts on crude oil markets, gasoline pricing,
and antitrust law. On the first day of the hearings, the
Subcommittee heard from representatives of five major oil
companies: James Carter, Regional Director for the United
States, ExxonMobil Fuels Marketing Company; Gary R. Heminger,
President, Marathon Ashland Petroleum; Ross J. Pillari, Group
Vice President--U.S. Marketing, BP; David C. Reeves, President
of North American Products, ChevronTexaco Corporation; and Rob
Routs, President and CEO, Shell Oil Products U.S. These
witnesses described how they price gasoline and answered
questions about price spikes, parallel price increases, and
actions taken by oil companies that appear to influence prices.
On the second day of hearings, the Subcommittee heard first
from Senator Ron Wyden (D-Oregon) who has spent years examining
gasoline prices. The next panel of witnesses consisted of three
senior State officials who had experience challenging gasoline
price increases in their States: The Honorable Richard
Blumenthal, Attorney General for the State of Connecticut; the
Honorable Jennifer Granholm, Attorney General for the State of
Michigan; and Tom Greene, Senior Assistant Attorney General for
Antitrust, California Department of Justice. Finally, the
Subcommittee heard testimony from five experts on gasoline
markets and antitrust law: Peter Ashton, President, Innovation
and Information Consultants, Inc.; Dr. Justine S. Hastings,
Assistant Professor of Economics, Dartmouth College; Dr. R.
Preston McAfee, Murray Johnson Professor of Economics,
University of Texas; and Dr. Philip Verleger, Jr., President,
PK Verleger, LLC.
Following the hearings, Senator Levin urged the
Administration to take certain specific actions to protect the
availability of gasoline and the reasonableness of its price,
including the development of uniform gasoline specifications
and the assignment of adequate resources to the Energy
Information Administration to provide timely data on energy
markets. Senator Levin asked the Federal Trade Commission to
scrutinize future proposed oil industry mergers for their
impact on market concentration and on U.S. gasoline prices,
storage, and transportation. He also asked the Environmental
Protection Agency to review the effects of reformulated
gasoline on prices and requested a GAO report on the impact of
oil industry mergers on gasoline prices. Finally, he initiated
a second phase of the Subcommittee's investigation to examine
the pricing of crude oil which, in turn, affect not only the
price of gasoline, but also home heating oil, jet fuel, diesel
fuel, and other key fuels important to consumers.
H. The Role of the Board of Directors in Enron's Collapse (May 7, 2002)
In January 2002, Senator Levin announced a bipartisan
investigation into issues related to the collapse of Enron
Corporation, which had once been the seventh largest company in
the United States, abruptly declared bankruptcy on December 2,
2001, and was subsequently discovered to have been involved in
a litany of corporate abuses from deceptive accounting to price
manipulation, insider dealing, and tax evasion. Working as a
team, the Majority and Minority staffs of the Subcommittee
conducted the most in-depth Enron investigation undertaken by
any Congressional committee. Their efforts included reviewing
over 2 million pages of documents, conducting over 100
interviews, preparing for 4 days of hearings, and drafting two
Subcommittee reports. The investigation exposed how Enron used
complex financial transactions to dishonestly report better
financial results than the company actually experienced,
thereby misleading investors, employees, and others who
suffered substantial losses. It also exposed actions taken by
the Enron Board of Directors and major U.S. financial
institutions that failed to halt, and in some cases
facilitated, Enron's misconduct.
The Subcommittee held its first Enron hearing on May 7,
2002. This hearing focused on the role of the Enron Board of
Directors in the collapse of the company. The first panel of
witnesses consisted of five current or former members of the
Enron Board of Directors: Norman Blake, current Chairman of the
Enron Board and former member of the Finance and Compensation
Committees; John Duncan, former Chairman of the Executive
Committee; Herbert Winokur, Jr., former Chairman of the Finance
Committee; Robert Jaedicke, former Chairman of the Audit and
Compliance Committee; and Dr. Charles LeMaistre, former
Chairman of the Compensation and Management Development
Committee. The second panel of witnesses consisted of experts
on accounting and corporate governance: Michael Sutton, former
Chief Accountant of the Securities & Exchange Commission from
1995 until 1998; Charles Elson, Director of the Center for
Corporate Governance at the University of Delaware; and Robert
Campbell, former Chairman and CEO at Sunoco, Inc. and current
member of the Board at Hershey Foods, CIGNA, and Pew Charitable
Trusts.
Two months later, on July 8, 2002, the Subcommittee
released a bipartisan report containing findings and
recommendations regarding the role of the Enron Board of
Directors. The Subcommittee report found that the Enron Board
of Directors had failed to safeguard Enron shareholders and had
contributed to the company's collapse by allowing Enron to
engage in high-risk accounting practices, inappropriate
conflict of interest transactions, extensive undisclosed off-
the-books activities, and excessive executive compensation. The
report also found that Enron Board members had refused to admit
any missteps, mistakes, or responsibility for the company's
demise.
The Subcommittee report also presented a number of
recommendations to strengthen boardroom oversight and curb
excessive compensation, deceptive accounting and other
corporate misconduct. These bipartisan recommendations included
strengthening audit committee expertise and independence,
urging the compensation committee to stop excessive
compensation, prohibiting high-risk accounting and conflict of
interest transactions, and ending the practices of using
corporate funds to make personal loans to officers and
directors. Most of these recommendations were subsequently
included in reforms made to the listing requirements of the New
York Stock Exchange or in the Sarbanes-Oxley Act which became
law in July 2002.
I. The Role of the Financial Institutions in Enron's Collapse (July 23
and 30, 2002)
A second focus of the Subcommittee's investigation into
Enron's collapse was to examine the role played by major U.S.
financial institutions and to determine whether and to what
extent some of these institutions contributed to the company's
deceptive practices. These hearings, which were held in July
and December 2002, presented evidence that Citigroup, J.P.
Morgan Chase, Merrill Lynch, and other major U.S. financial
institutions had not only participated in, but at times
designed, advanced, and profited from, complex financial
transactions explicitly intended to help Enron engage in
deceptive accounting or tax strategies.
The first set of these hearings, held in July 2002, took
place over 2 days and examined transactions involving Enron and
three financial institutions, Citigroup, J.P. Morgan Chase and
Co. (``Chase''), and Merrill Lynch. Each of the transactions
examined in the July hearings resulted in misleading
information in Enron's financial statements that made Enron
appear to be in better financial condition than it was.
The first day of the July hearings looked at more than $8
billion in deceptive transactions referred to as ``prepays,''
which Citigroup and Chase used to issue Enron huge loans
disguised as commodity transactions. By characterizing the
transactions as commodity transactions rather than loans,
Citgroup and Chase enabled Enron to claim the loan proceeds
were cash flow from business operations rather than cash flow
from financing, thereby misleading investors and analysts about
the nature of Enron's incoming cash flow.
The Subcommittee heard from several panels of witnesses.
The first panel consisted of Robert L. Roach, Counsel and Chief
Investigator of the Permanent Subcommittee on Investigations,
who led the Subcommittee's investigation of Enron. He was
accompanied by Gary M. Brown, Special Counsel to the Minority,
Committee on Governmental Affairs, who had assisted the
Subcommittee's investigation. Mr. Roach summarized the
Subcommittee's investigation and findings. The second panel
consisted of an accounting expert and several representatives
of Moody's Investors Service and Standard & Poor's examining
the misleading accounting used to depict the transactions and
the significance for Enron's financial statements and credit
analysis. These witnesses included Lynn Turner, former Chief
Accountant of the Securities & Exchange Commission; Pamela
Stumpp, Managing Director and Chief Credit Officer in the
Corporate Finance Group, accompanied by John Diaz, Managing
Director in the Power & Energy Group, from Moody's Investors
Service; and Ronald Barone, Managing Director in the Utilities,
Energy Project Finance Group, Corporate and Government Ratings,
accompanied by Nik Khakee, Director of the Structured Finance
Group from Standard & Poor's.
The third panel consisted of representatives from J.P.
Morgan Chase: Jeffrey Dellapina, Managing Director of JPMorgan
Chase Bank in New York, accompanied by Donald McCree, Managing
Director at J.P. Morgan Securities, Inc. in New York, and
Robert Traband, Vice President of JPMorgan Chase Bank in
Houston.
The final panel in the first day of hearings consisted of
representatives from Citigroup: David Bushnell, Managing
Director of Global Risk Management for Salomon Smith Barney/
Citigroup, in New York; James Reilly, Jr., Managing Director of
Global Power & Energy Group, Salomon Smith Barney/Citigroup, in
Houston; Richard Caplan, Managing Director and Co-Head, Credit
Derivatives Group, Salomon Smith Barney North American Credit/
Citigroup, in New York; and Maureen Hendricks, Senior Advisory
Director, Salomon Smith Barney/Citigroup, in New York.
The second day of the July hearings examined a sham asset
sale of Nigerian power barges from Enron to Merrill Lynch just
before the end of the year 2000, which allowed Enron to claim
the alleged ``sale'' revenue on its 2000 financial statements
and boost its year-end earnings. The hearing showed that this
transaction did not qualify as a true sale under accounting
rules, because Enron had eliminated all risk from the deal by
secretly promising Merrill Lynch to arrange a resale of the
assets within 6 months and guaranteeing a 15 percent return on
the deal. The Subcommittee heard from two panels of witnesses
representing Merrill Lynch. The first panel consisted of two
Merrill Lynch investment bankers who were involved in the barge
transaction and who invoked their Fifth Amendment rights and
were excused from testifying: Robert Furst, former Managing
Director of Merrill Lynch & Co., in Dallas; and Schuyler
Tilney, Managing Director of Global Energy & Power, in Global
Markets & Investment Banking, at Merrill Lynch & Co., in
Houston. The Subcommittee then heard from G. Kelly Martin,
Senior Vice President and President of International Private
Client Division at Merrill Lynch in New York.
Substantial evidence presented at the July hearings showed
that the financial institutions involved in the transactions
with Enron were fully aware of the significance of their
actions--they structured the deals, signed the paperwork,
supplied the financing, and even established new special
purpose entities for the transactions knowing that Enron was
using the transactions to report that the company was in better
financial condition than it really was. In the case of
Citigroup and Chase, the banks not only assisted Enron, they
developed the deceptive prepays as a financial product and sold
it to other companies as so-called ``balance sheet friendly''
financing, earning millions in fees.
Subsequent to the hearing, without admitting guilt, Merrill
Lynch paid $80 million to the Securities & Exchange Commission
and the U.S. Department of Justice to resolve potential
liability related to the Nigerian barge deal and another
transaction with Enron. Citibank and Chase announced that they
would strengthen their internal procedures to prevent future
participation in transactions resulting in misleading
accounting on a client's financial statements. Investigations
are ongoing of Citigroup and Chase's transactions with Enron by
the Securities & Exchange Commission and U.S. Department of
Justice.
J. Oversight of Investment Banks' Response to the Lessons of Enron
(December 11, 2002)
On December 11, 2002, the Subcommittee held a third day of
hearings examining the role played by some major U.S. financial
institutions in Enron's collapse. The December hearing focused
on four multi-million dollar structured finance transactions
known as Fishtail, Bacchus, Sundance, and Slapshot, involving
Enron, Citigroup, and J.P. Morgan Chase (``Chase''). These
transactions had taken place over a 6-month period beginning in
December 2000 and ending in June 2001. All four transactions
related to a new business venture by Enron involving pulp and
paper trading. All four had been financed primarily by the
Salomon Smith Barney unit of Citigroup or by Chase. The hearing
presented evidence showing that Citigroup and Chase actively
aided Enron in executing the four transactions, despite knowing
the transactions utilized deceptive accounting or tax
strategies, in return for substantial fees or favorable
consideration in other business dealings.
The Subcommittee heard from four panels of witnesses,
including Citigroup and Chase officials, a banking and
securities expert, and key Federal agencies.
The first panel consisted of Citigroup officials who were
directly involved in the Bacchus and Sundance transactions, as
well as a senior Citigroup official responsible for setting
corporate policy. The Citigroup witnesses were Charles Prince
III, Chairman and Chief Executive Officer of Citigroup's Global
Corporate and Investment Bank; David Bushnell, Managing
Director of Global Risk Management for Citigroup/Salomon Smith
Barney; Richard Caplan, Managing Director and Co-Head of the
Credit Derivatives Group at Salomon Smith Barney North American
Credit/Citigroup; and William Fox III, Managing Director of the
Global Power and Energy Group at Citibank. Mr. Caplan
participated directly in both the Bacchus and Sundance
transactions. Mr. Fox was directly involved in the Bacchus
transaction and was the key Citigroup official who communicated
with Enron's chief accountant, Andrew Fastow, regarding the
verbal guarantee of the ``equity investment'' in the Caymus
Trust. Mr. Bushnell, as head of risk management, was directly
involved in the Sundance transaction. At the hearing, Mr.
Bushnell disclosed that, although he had strongly urged
Citigroup not to participate in Sundance, he may have provided
the final oral approval that allowed this project to proceed.
Mr. Prince, who was not directly involved in either
transaction, described a number of Citigroup's post-Enron
reforms, including a new corporate policy to prevent
Citigroup's participation in any transaction in which the
transaction's net effect is not accurately disclosed to a
company's investors and analysts.
The second panel consisted of Chase officials who were
directly involved in the Fishtail and Slapshot transactions, as
well as senior officials responsible for setting Chase's
corporate policy. The Chase officials were Michael Patterson,
Vice Chairman of J.P. Morgan Chase and Company; Andrew
Feldstein, Managing Director and Co-Head of Structured Products
and Derivatives Marketing at J.P. Morgan Chase and Company;
Robert Traband, Vice President of J.P. Morgan Chase and Company
in Houston, accompanied by Eric Peiffer, Vice President of J.P.
Morgan Chase and Company in New York. Mr. Peiffer played a key
role in developing and marketing the Slapshot tax structure.
Mr. Peiffer and Mr. Traband dealt directly with Enron to design
and carry out the Slapshot transaction examined in this report.
Mr. Feldstein, who was not directly involved in Slapshot and is
the new head of the Chase division carrying out structured
finance and derivatives transactions, described Chase's renewed
commitment to the principles of integrity and transparency in
its structured finance and derivative transactions. Mr.
Patterson, who was also not directly involved in Slapshot,
described a number of Chase's post-Enron reforms, including a
new transaction review committee, which he heads, to prevent
Chase's participation in transactions that facilitate deceptive
accounting or carry other reputational risks. The Chase
witnesses also testified at the hearing that Chase would no
longer market the Slapshot tax structure or participate in
transactions similar to Slapshot.
The third panel at the hearing consisted of testimony from
Muriel Siebert, Muriel Siebert and Company, Inc., who was the
first woman member of the New York Stock Exchange, the first
woman Supervisor of Banking for the State of New York, and the
current Owner and President of a brokerage house. Ms. Siebert
testified that, since Enron's collapse, her business had seen
individual investors leave the stock market altogether because
``they did not trust the system.'' She expressed great concern
about the deceptive transactions discussed in the hearing and
the need to initiate reforms to prevent U.S. financial
institutions from facilitating deceptive accounting or tax
transactions.
The fourth and final panel consisted of top Federal
regulators at the Federal Reserve, Securities & Exchange
Commission (``SEC''), and Office of the Comptroller of the
Currency (``OCC''). The witnesses were Richard Spillenkothen,
Director of the Division of Banking Supervision and Regulation
at the Federal Reserve; Annette Nazareth, Director of the
Division of Market Regulation at the SEC; and Douglas Roeder,
Senior Deputy Comptroller for Large Bank Supervision at the
OCC. These witnesses indicated that a relatively small universe
of financial institutions--for example, less than ten of the
national banks overseen by the OCC--engage in the type of
complex structured finance transactions examined by the
Subcommittee. They also acknowledged a regulatory gap that now
exists in overseeing these transactions, since the SEC does not
generally regulate banks, and the bank regulators do not
generally oversee accounting practices. All three witnesses
agreed that banks should not ``engage in borderline
transactions that are likely to result in significant
reputational or operational risks to the banks.''
Following the hearing, on January 2, 2003, the Subcommittee
issued a bipartisan report detailing the four transactions and
calling on Federal securities and bank regulators to stop U.S.
financial institutions from aiding and abetting dishonest
accounting. The report presented several recommendations
focused on coordinated action by the SEC and bank regulators to
bridge a current gap in Federal oversight that exists because
the SEC does not generally regulate banks, and bank regulators
do not generally regulate accounting practices overseen by the
SEC. The recommendations included calling for a joint review of
structured finance products and transactions to identify those
that facilitate deceptive accounting, an SEC policy statement
making it clear that the SEC would take enforcement action
against a financial institution that offers deceptive financial
products or participates in deceptive transactions, and a
policy statement by bank regulators making it clear that bank
examiners, as part of their routine bank examinations, may
evaluate a bank's structured finance activities and declare
problematic products or activities an unsafe and unsound
banking practice.
III. Legislative Activities During the 107th Congress
The Permanent Subcommittee on Investigations does not have
legislative authority, but because its investigations play an
important role in bringing issues to the attention of Congress
and the public, the Subcommittee's work frequently contributes
to the development of significant legislative initiatives. The
Subcommittee's activity during the 107th Congress was no
exception, with Subcommittee hearings and Members playing
prominent roles in the development of a number of legislative
initiatives.
A. Money Laundering Abatement Act
(S. 1371--by Senators Levin, Grassley, Sarbanes, Kyl, DeWine, Bill
Nelson, Durbin, Stabenow and Kerry)
Following a 3-year Subcommittee investigation, 4 days of
Subcommittee hearings, and two staff reports on money
laundering problems affecting private banking and correspondent
banking practices in the United States, on August 3, 2001,
Senators Levin, Grassley, and others introduced the Money
Laundering Abatement Act, S. 1371, to correct many of the
problems identified in the Subcommittee's work. Among other
provisions, S. 1371 contained language barring U.S. banks from
opening accounts for foreign shell banks, requiring U.S. banks
to use enhanced due diligence before opening accounts for
foreign offshore banks and private banking accounts for wealthy
foreign individuals or political figures, strengthening the
ability of U.S. law enforcement to subpoena records related to
foreign bank correspondent accounts and to freeze and seize
criminal proceeds from these accounts, expanding the list of
foreign crimes triggering a U.S. money laundering offense to
include foreign corruption offenses, and strengthening the
ability of U.S. prosecutors to prosecute money laundering cases
involving foreign banks, corporations, or individuals. After
the terrorist attack of September 11, 2001, S. 1371 formed the
basis for the anti-money laundering provisions in Title III of
the USA Patriot Act, and nearly all of its provisions were
expanded and enacted into law when the USA Patriot Act, H.R.
3162, was signed by President Bush on October 26, 2001, at a
White House signing ceremony.
B. Shareholder Bill of Rights Act
(S. 2460--by Senator Levin)
During the Subcommittee's year-long investigation into
corporate misconduct at Enron Corporation, on May 6, 2002,
Senator Levin introduced the Shareholder Bill of Rights Act, S.
2460, to address a number of the problems identified in the
Subcommittee's Enron investigation. Among other provisions, S.
2460 contained language to strengthen the process for issuing
corporate accounting standards by providing an independent
source of funding for the organization that issues them, the
Financial Accounting Standards Board; strengthen auditor
independence by barring an audit firm from auditing its own
work and from providing non-auditing services to a company
during a specified period; strengthen corporate accounting by
requiring corporate audit committees to oversee companies'
accounting practices and prohibiting companies from improperly
influencing or misleading an auditor; require shareholder
approval of any stock option compensation plan not shown on
company financial statements as an expense; direct the SEC not
to prohibit shareholder proposals permitted under State law to
remove a director or outside auditor; bar preferential
treatment by companies of officer or director compensation when
during a company bankruptcy; and strengthen disclosure of
company loans to directors and officers and company
transactions involving persons affiliated with a board member.
A number of the provisions in S. 2460, or provisions adopting
similar requirements, were included in a Senate corporate
reform bill, S. 2673, which was enacted into law as H.R. 3763,
the Sarbanes-Oxley Act. Other provisions in the Sarbanes-Oxley
Act, such as Section 402 barring company-financed loans to
corporate officers and directors, also drew in part on the
Enron investigation conducted by the Subcommittee.
C. United States Postal Service Commission Act of 2002
(S. 2754--by Senator Collins)
On July 18, 2002, Senator Collins introduced the ``United
States Postal Service Commission Act of 2002.'' This
legislation was designed to establish a Commission to examine
the challenges facing the Postal Service, and develop solutions
to ensure its long term viability and increased efficiency. The
Commission was also charged with developing specific
recommendations and legislative proposals that Congress and the
Postal Service can implement.
Senator Collins introduced this legislation in response to
the Postal Services' ballooning liabilities, billion dollar
losses and shrinking revenue sources. At the same time, the
Postal Service delivers more than 200 billion pieces of mail
each year to nearly 140 million addresses, a number that is
growing to the tune of 1.7 million new addresses each year. In
addition, the Postal Service delivers mail to every customer, 6
days a week at affordable rates. Most commercial enterprises
would find it uneconomical, if not impossible, to deliver mail
and packages to many areas at rates that the Postal Service has
been offering.
Moreover, the Postal Service is the eleventh largest
enterprise in the Nation with $66 billion in annual revenue.
The Postal Service itself employs more than 700,000 career
employees, and is the linchpin of a $900 billion mailing
industry that employs nine million Americans in fields as
diverse as direct mailing, printing, and paper production.
The Commission was to be comprised of leaders from
business, academia and other fields to consider all relevant
aspects of the Postal Service. The Commission was to be given 1
year to carry out its study and produce legislative proposals
for consideration by the Administration and the Congress.
S. 2754 was referred to the Senate Governmental Affairs
Committee, but no Committee action was taken on the bill. On
December 11, 2002, President George W. Bush established a
Commission on the Postal Service with a mandate and makeup
similar to that outlined in S. 2754.
D. National Fraud Against Senior Citizens Awareness Week
(S. Res. 281--by Senators Collins and Levin)
On June 5, 2002, Senator Collins and Senator Levin
introduced a resolution designating the week of August 25, 2002
``National Fraud Against Senior Citizens Awareness Week.'' The
resolution passed the Senate by unanimous consent on June 27,
2002 with 20 bipartisan cosponsors.
This resolution was designed to draw attention to the
Postal Service's and U.S. Postal Inspection Service's efforts
to increase public awareness of mail, Internet, and
telemarketing schemes that target elderly Americans. It is
through increased awareness on the part of seniors, their
families, and their caregivers that such schemes, which rob
seniors not only of their hard-earned savings but of their
dignity and self respect, can best be prevented.
The comprehensive effort included posters hung in post
office lobbies nationwide to highlight the problem and inform
seniors and their families about the steps they can take to
protect themselves and report fraud.
The campaign also included newspaper advertisements in the
13 States and public service announcements by national
spokesperson Betty White on the television and radio. Finally,
in an effort to reach those seniors who may leave their homes
infrequently, the Postal Service included inserts alerting
seniors to fraudulent schemes with the stamps that individuals
purchase by mail.
E. Human Tissue Transplant Safety Act of 2002
(S. 2531--by Senators Collins, Clinton, and Durbin)
In May 2002, Senator Collins introduced S. 2531, ``The
Human Tissue Transplant Safety Act of 2002.'' The legislation
was a direct result of the Subcommittee's investigation. The
bill was designed to grant explicit authority to the Food and
Drug Administration (FDA) to conduct oversight of tissue
establishments, which includes any entity engaged in the
recovery, screening, testing, processing, storage, or
distribution of human tissue or tissue-based product.
Another provision in the bill requires mandatory adverse
event reporting. Under the current regulatory structure, tissue
entities are not required to report defined adverse events
which can make it very difficult for the FDA to assess the
extent of a public health problem. Moreover, in addition to the
mandatory reporting requirement, there is also a provision in
the bill that calls for the creation on a centralized database
that would contain the reports. Clearly, there is a need for a
centralized repository for adverse events since the donated
tissue may be obtained in one State, sent to another for
processing, and may be used in a surgical procedure in still
another State. Another benefit of a centralized database would
be the accessability of the information to both the FDA and the
Centers for Disease Control and Prevention (CDC). The CDC
currently does not have timely access to the information and
must instead rely on information it solicits from the FDA and
State health departments. Tissue entities conducting business
in the United States would be required to register with the FDA
and failure to do would result in a violation.
IV. Reports, Prints, and Studies
A. Correspondent Banking: A Gateway For Money Laundering (February 5,
2001); Supplement to the February 5, 2001 Report On
Correspondent Banking: A Gateway For Money Laundering (Case
Histories 8, 9, and 10) (February 28, 2001) (Reports prepared
by the Minority Staff and reprinted in S. Hrg. 107-84)
In February 2001, the Subcommittee issued two Minority
staff reports on ``Correspondent Banking: A Gateway For Money
Laundering,'' describing the results of a year-long
investigation led by Senator Levin into how U.S. banks were
being used by foreign banks to launder the proceeds of criminal
activity. The reports, which are meant to be read as a single
document and together exceed 450 pages, provide an inside look
into the operations of ten foreign banks that have used major
U.S. banks to move and launder millions of dollars obtained
through drug trafficking, financial frauds, bribes, tax
evasion, and illegal gambling operations.
This correspondent banking report was completed as part of
a larger anti-money laundering investigation initiated by
Senator Levin in 1999, and was released in connection with
Subcommittee hearings held on this topic in March 2001. The
report was based on the review of thousands of documents
produced by banks, financial regulators, law enforcement,
courts, and others, as well as numerous interviews of
individuals personally involved in money laundering operations,
U.S. and foreign bank owners and employees, U.S. and foreign
financial regulators and law enforcement officials, and banking
and money laundering experts. The report also included the
results of a survey sponsored by Senator Levin of 20 banks that
offer U.S. correspondent banking services to other banks.
The report presented ten detailed case histories explaining
how a particular foreign bank was able to open accounts and
obtain services from a U.S. bank, despite having a questionable
background or operating in a jurisdiction known for weak anti-
money laundering controls; how that foreign bank misused its
U.S. accounts to launder criminal proceeds; and what oversight
was exercised by the U.S. bank to detect and report suspicious
activity. The profiled foreign banks included four shell banks
and six offshore banks in various Caribbean, Latin American,
European, and South Pacific jurisdictions. The U.S. banks
included both major U.S. financial institutions as well as U.S.
offices of major foreign banks.
One case history involved a small offshore bank, British
Trade and Commerce Bank (BTCB), which began operations in 1997.
Despite its status as a new offshore bank in a small Caribbean
jurisdiction known for weak anti-money laundering controls,
BTCB was able, within 3 years, to open accounts at several U.S.
banks and move more than $85 million through them, including
millions of dollars associated with financial frauds and
illegal gambling operations. Another small offshore bank in the
Caribbean, American International Bank (AIB), facilitated and
profited from financial frauds in the United States for 5
years, laundering millions of dollars through correspondent
accounts at major U.S. banks, before collapsing from insider
abuse and a sudden withdrawal of deposits. The report showed
that AIB also enabled even smaller, offshore shell banks to
gain access to the U.S. banking system by allowing them to open
an account with AIB and then use AIB's bank accounts in the
United States. A third small offshore bank, British Bank of
Latin America (BBLA), closed its doors after being named in two
separate U.S. money laundering stings. This bank, which was
licensed in the Caribbean but accepted clients only from
Colombia, operated as an affiliate of a major bank in London
and had accounts at a major U.S. bank in New York. Although all
of the banks involved knew that BBLA provided U.S. dollar
accounts to Colombian nationals, neither BBLA, its London
affiliate, nor its U.S. correspondent bank took any steps to
guard against the accounts being misused on the Colombian Black
Market Peso Exchange to launder U.S. dollars obtained from
illegal drug trafficking. The result was that BBLA's U.S.
accounts became a conduit for illegal drug money.
In addition to detailing the ten case histories, the report
described a number of other money laundering problems involving
U.S. correspondent accounts opened for foreign banks. These
problems included difficulties associated with freezing and
seizing suspect funds deposited into these accounts, obtaining
reliable and complete information related to the foreign banks,
their customers and accounts, and tracking multiple wire
transfers of funds from one bank to another across
international borders. The report also included information
provided by a former offshore bank owner explaining how he
helped his U.S. clients avoid scrutiny and hide their offshore
funds.
The report also contained specific findings and
recommendations. The report found that U.S. correspondent
banking had become a significant gateway for rogue foreign
banks and their criminal clients to carry on money laundering
and other criminal activity in the United States and to benefit
from the safety and soundness of the U.S. banking industry. It
found that foreign offshore banks, shell banks, and banks in
jurisdictions with weak anti-money laundering controls carried
particularly high money laundering risks, yet U.S. banks were
routinely establishing correspondent relationships with such
banks and exercising little oversight of their accounts. The
report found that most U.S. banks did not have adequate anti-
money laundering safeguards in place with respect to
correspondent banking, and this problem was longstanding,
widespread and ongoing. It also found that, in the prior 3
years, some U.S. banks had become concerned about the
vulnerability of correspondent banking to money laundering and
begun taking steps to reduce the money laundering risks, but
these steps were slow, incomplete, and not industry-wide.
The report offered a number of recommendations to
strengthen U.S. anti-money laundering laws and banking
practices in the correspondent banking field. Many of these
recommendations were included in the Money Laundering Abatement
Act, S. 1371, introduced by Senator Levin and others during the
107th Congress. This bill, in turn, formed the basis for the
anti-money laundering provisions contained in Title III of the
USA Patriot Act and enacted into law in October 2001, as
explained earlier.
B. Property ``Flipping'': HUD's Failure To Curb Mortgage Fraud
(September 25, 2001) (Report prepared by the Minority Staff) S.
Prt. 107-44
On September 25, 2001, the Subcommittee issued a Minority
Staff report on ``Property `Flipping': HUD's Failure To Curb
Mortgage Fraud,'' which was the result of a 9-month
investigation. The term refers to the purchase and quick resale
of a home at a huge mark-up, often with little work done to
improve the property, in order to create the false illusion of
a robust real estate market though the use of phony paperwork
and deceptive sales practices. The practice of ``flipping''
poses significant risks to low-income, first-time home buyers,
and may affect the overall stability of a neighborhood.
During the Subcommittee's investigation, staff
investigators interviewed over 100 witnesses, including home
buyer victims, real estate brokers, lenders, and attorneys
involved in mortgage flipping cases, as well as government
officials, community activists, and other stakeholders. These
investigative efforts confirmed that the phenomenon of flipping
is not simply a local, State, or even regional problem. It is,
rather, a significant nationwide problem.
Although the purchase and quick resale of a house at an
increased price are not in and of themselves unlawful, the
practice can cross into illegality when documents are falsified
in order to lure lenders or buyers into investing more money in
a house than it is actually worth. In order to finance the
transaction, such unscrupulous sellers may also make
arrangements to secure a mortgage that is insured by the
Federal Housing Authority (FHA). The principal advantage to
having an FHA-backed mortgage is that if the buyer defaults,
the government will reimburse the lender for almost the entire
amount of the loan. As a result, where the FHA backs mortgages,
there is minimal risk in lending money to marginally qualified
borrowers. Designed as a means to facilitate loans to low-
income families with little credit history, this system is
sometimes subject to abuse where unscrupulous sellers are
concerned: Too often, the process results in the Federal
Government either insuring questionable loans or simply
subsidizing mortgage fraud.
The Subcommittee's investigation culminated in 2 days of
oversight hearings on June 29 and 30, 2000. Among the witnesses
who testified were three purchasers of flipped homes: Lisa
Smith, a New York City police officer, and single mother; Sonia
Pratts, a health care assistant from Hollywood, Florida; and
Steekena Rollins, a day-care service provider from Chicago,
Illinois. All three spent their entire life savings to buy into
the American dream of home ownership, only to have their
experience transformed into a nightmare. As Chairman Collins
said in her opening statement,
``I find it very troubling that so many citizens in our
Nation's cities have been victimized by the predatory
practices of unscrupulous real estate agencies,
appraisers, and lenders. But what I find most appalling
is that the Federal Government has essentially
subsidized much of this fraud.''
At the request of Senator Collins and Representative Rick
Lazio (R-NY), GAO prepared a report, entitled ``Single Family
Housing: Stronger Oversight of FHA Lenders Could Reduce HUD's
Insurance Risk.'' Stanley Czerwinski--accompanied by Robert
Procaccini, Assistant Director for FHA Insurance Programs, and
Paul Schmidt, Assistant Director for Single-Family Housing
Programs--appeared before the Subcommittee in 2000 to discuss
GAO's findings.
As the GAO officials made clear, FHA is the principal
provider of Federal mortgage insurance, and is also the major
lending source for first-time, low-income, and minority home
buyers. As such, the agency relies on approximately 10,000
lenders to carry out its mission, and about 2,900 of those
lenders are granted ``Direct-Endorsement'' (DE) authority. This
means that these lenders can gather and process loan
information, underwrite the loans, and make eligibility
determinations, all without prior HUD review.
Given HUD's reliance on private lenders and the authority
they are given to act on HUD's behalf, oversight is essential.
GAO's review found problems with HUD's oversight of the
program. Specifically, GAO identified problems in three
particular areas: (1) HUD's process for granting FHA-approved
lenders DE authority provides only limited assurance that the
lenders are in fact qualified; (2) HUD's monitoring of lenders
does not adequately focus on the lenders and loans that pose
the greatest insurance risks to the Department; and (3) HUD has
not taken sufficient steps to hold lenders accountable for poor
performance and program violations.
Senator Collins noted that the problems GAO identified in
this report were long-standing issues of which HUD had already
been advised in prior audits and reports. Despite this history
of studies calling attention to the problem, however, no
apparent progress had been made to remedy the deficiencies. In
1993, for example, HUD's Office of the Inspector General (OIG)
completed an audit of FHA's single-family mortgage program and
found that HUD's post-endorsement reviews did not consistently
ensure quality underwriting. In 1997, the GAO evaluated the
appraisal process and found that HUD was not adequately
monitoring appraisers--as well as that the agency was not
moving effectively against faulty appraisers. Finally, in 1999,
the GAO issued yet another report on the subject. Entitled
``Single-Family Housing: Weaknesses in HUD's Oversight of the
FHA Appraisal Process,'' this study similarly found that: (a)
HUD was still not doing a good job monitoring the performance
of appraisers; (b) HUD was not holding appraisers accountable
for the quality of their appraisals, and (c) the Department had
limited assurance that its appraisers were in fact
knowledgeable.
HUD was made aware on numerous occasions of these problems
and vulnerabilities in its FHA program, and of the Department's
faulty oversight of mortgage programs. Instead of cracking down
on poor performing lenders, however, the agency did little or
nothing to stop such abuses. The unfortunate result of this
failure is that unscrupulous sellers, effectively subsidized by
FHA-backed loans, made property-flipping victims out of many of
the very people whom HUD's program was supposed to help attain
the American dream of homeownership.
The victims of property flipping depended on HUD to protect
them from the predatory sales and lending practices revealed by
the Subcommittee's investigation. Unable to obtain the
conventional mortgages needed to buy their homes, these low-
income Americans had no alternative but to turn to FHA-
supported programs in order to gain any access to the housing
market. HUD has a duty to protect such home buyers and to help
keep them from becoming the victims of fraudulent sales and
lending practices. HUD also has an obligation as to safeguard
the integrity of the insurance fund, which could be imperiled
should sloppy oversight of loan-guarantee practices leave the
fund responsible for covering the cost of many millions of
dollars' worth of bad loans. Unfortunately, HUD failed to
fulfil these responsibilities. Moreover, the Department
mischaracterized the assistance it was able to provide to those
home buyers who fell victim to fraudulent practices in the
poorly-overseen lending environment that HUD had for so long
permitted to exist.
C. Gas Prices: How Are They Really Set? (April 29, 2002) (Report
prepared by the Majority Staff and reprinted in S. Hrg. 107-
509)
On April 29, 2002, the Subcommittee issued a 400-page
report, prepared by the Majority staff after a year-long
investigation, entitled, ``Gas Prices: How Are They Really
Set?'' This report showed how oil industry mergers, refinery
closings, and increasingly ``tight'' gasoline supplies had
increased market concentration and given some refiners
sufficient market power to reduce gasoline supplies and
increase gasoline prices. Other factors leading to higher
prices and spikes in the Midwest included regional pipeline
limitations, price variations from different fuels, and the
practice of ``parallel pricing'' in which retailers looked to
competitors to set gasoline prices.
The report was based upon a review by Subcommittee staff of
over 250,000 documents; analysis of market data provided by the
Energy Information Administration and wholesale and retail
price data purchased from the Oil Price Information Service;
and interviews with oil companies, distributors, service
station owners and dealers, trade associations, economists and
other experts. The report included an analysis of the
operations and structure of the oil industry, with particular
focus on downstream activities from the refinery to the pump,
and on three regions: The West Coast (California in
particular); the Midwest (Michigan, Ohio and Illinois, in
particular); and the East Coast (Maine and the Washington, D.C.
area, in particular).
The report showed that, over the prior 3-year period,
gasoline prices had increased significantly and showed greater
volatility and more ``extraordinary'' price spikes than in past
years. It found that mergers in the oil industry over the last
few years and the closing of many refineries over the past 20
years had increased concentration in the refining industry. It
also found that gasoline supplies had dropped overall, while
demand had increased, resulting in an increasingly ``tight''
market that was increasingly sensitive to even minor supply
disruptions. In certain regions of the United States, the
report determined that the refining market was so concentrated
and the gasoline market was so finely balanced, that oil
companies could act to limit supply and from time to time spike
prices to maximize profits, without little or no challenge due
to insufficient competition. The report also presented internal
oil company documents showing that the oil companies viewed it
to be in their economic interest to keep gasoline inventories
low and the supply and demand balance tight, to maximize prices
and profits.
The report also documented a variety of specific gasoline
pricing practices. It found, for example, that oil companies do
not set wholesale or retail prices based solely upon the cost
to manufacture and sell gasoline; rather these prices are set
on the basis of market conditions, including the prices of
competitors. The report found, for example, that most oil
companies and gasoline stations tried to keep their prices at a
constant price differential with respect to one or more
competitors, leading to prices in specific markets that tended
to go up and down together. The report included evidence of one
such leader-follower pricing pattern in Michigan and Ohio in
2001, in which one company routinely bumped up the price of
gasoline on Wednesdays or Thursdays and a specific competitor
then routinely followed.
The report also documented oil company use of a pricing
system referred to as ``zone pricing'' which allowed oil
companies to charge the highest possible amount for their
gasoline in a given area. The report found that some oil
companies, using a highly sophisticated analysis of market and
consumer factors, divided a State or region into zones, each
representing a particular market. Competition was then limited
to the stations within each zone. For example, if most people
bought gasoline on their way home from work instead of on their
way to work, a station on one side of a rush hour street may be
treated as in one zone and the same brand station on the other
side of the street in another zone. The oil company would then
charge those two gas stations different prices for their
gasoline, because the station on the side of the street with
easy access for evening rush hour traffic might be able to get
a higher price for its gas than the station on the other side
of the street.
Another pricing practice documented in the report involved
how gasoline station owners set their retail prices. The report
showed that for those stations that leased from a major oil
company (about one-fourth of the 117,000 branded stations) the
oil company recommended to the station dealer a retail price.
Evidence supplied by several dealers indicated that if they did
not charge their retail customers the recommended price, the
next delivery of gasoline from the oil company would reflect
any price increase instituted by the dealer so that the dealer
would not earn any additional profit. For example, if a dealer
priced the gasoline at $1.40/gallon when the oil company
recommended $1.35, the next delivery of gasoline to the station
(and deliveries are sometimes daily for busy stations) would
cost an additional 5 cents per gallon. The practical effect was
pressure on the dealer to conform with the recommended retail
price. The report concluded that, in these situations, it was
the major oil company rather than the local dealer that
determined the gasoline price and benefitted from higher prices
and profit margins.
The report also examined other factors affecting gasoline
prices, including the advent of so-called ``hypermarkets'' in
which large discount stores like Wal-Mart and Cosco sell the
lowest priced gasoline in a market; the use of gasoline storage
facilities and pipelines by some oil companies to limit
supplies and market competition; and the impact of boutique
fuels required in some locations to address environmental
concerns.
The report was released in connection with Subcommittee
hearings held on April 30 and May 2, 2002, examining the
pricing retail gasoline.
D. Phony Identification and Credentials Via the Internet (February 4,
2002) (S. Rept. 107-133)
On February 4, 2002, the Subcommittee issued a report,
entitled ``Phony Identification and Credentials Via the
Internet'' which highlighted both the wide variety of false
identification materials and credentials available over the
Internet, and the ways in which those individuals seeking to
manufacture and distribute phony identification are able to use
Internet-age technology. The report includes case studies of
several individuals involved in manufacturing, distributing and
purchasing false identification materials.
The report was based on the Subcommittee's 5-month
investigation and subsequent hearing held in May 2000 during
Senator Collins' chairmanship. The Subcommittee's work led to
the passage of legislation authored by Senator Collins, the
Internet False Identification Prevention Act of 2000, designed
to stem the spread of false identification obtained over the
Internet.
The proliferation of false identification has become a
serious public safety issue. False identification documents and
credentials can enable criminals to commit a host of crimes
ranging from identity theft to bank and credit card fraud and
allow them to fund larger and more dangerous criminal
activities. Phony identification can also enable criminals to
obtain bona fide, yet unsupported and unauthorized,
identification documents such as driver's licenses. Moreover,
criminals may be able to evade law enforcement by hiding behind
their false identities. Failing to curb the spread of false
identification can have grave consequences, as evidenced by the
apparent use of false identification and immigration documents
by some associates of the al Qaeda terrorist organization.
``While the manufacture, distribution and use of phony
identification are crimes in and of themselves, phony
identification and credentials are nearly always used to commit
other more serious crimes ranging from identity theft to bank
and credit card fraud. Criminals may also be able to evade law
enforcement by hiding behind their false identities,'' said
Senator Collins. ``As part of our war on terrorism, it is vital
that we do all we can to curb the availability of false
identification. I hope this report will help focus law
enforcement's attention on that effort.''
Technological developments during the past few years have
significantly increased the dangers associated with the
production and marketing of fake identification documents.
Today, both the necessary skills and materials are well within
the reach of a growing number of people. Moreover, it is
becoming even easier to obtain and create false identification
documents, which can then be used for a wide variety of
improper and illegal purposes.
False identification materials are distributed over the
Internet through a number of methods. Some websites offer to
make identification documents for customers which are then
delivered by mail. Others offer the computer files, known as
``templates,'' necessary to manufacture false identification
documents. Customers may purchase access to the templates and
download them to their own computers, or purchase a computer
disk containing the template files. Still other operators
simply offer the templates for free.
The Subcommittee found that the Internet has become a
significant source of illegal identification documents, both
actual identity documents containing false information and
templates that can be used to create fake documents. These
include driver's licenses from all 50 States, birth
certificates, Social Security cards, military identification
cards, student identifications, diplomas, press credentials,
and Federal agency credentials such as those used by the FBI
and CIA. The Subcommittee also found products such as Social
Security number generators, bar code generators, and
instructions for creating holograms. ``As we learned at our
hearing, the quantity and quality of the counterfeit
identification documents that can be obtained through the
Internet is astounding,'' said Senator Collins.
As a result of its investigation, the Subcommittee drew
three general conclusions. First, many Internet sites offer a
wide variety of phony identification documents, some of which
are of very high quality and include security features commonly
used by government agencies to deter counterfeiting.
Second, the disclaimers that can be found on many websites
are at odds with the marketing strategy pursued by the
operators of those websites. The Subcommittee found that
operators frequently attempted to shield themselves by claiming
that their products were ``for novelty purposes only.'' At the
same time, however, operators commonly implied that their
products were so authentic in appearance as to be illegal--
something they clearly considered to be a marketing asset.
Third, the Internet has played a leading role in fostering
the manufacture and the sale of high quality false
identification, and has made these products available to a vast
customer base with virtual anonymity for both the sellers and
the buyers. This has, in turn, presented significant challenges
for law enforcement.
Since the Subcommittee began its investigation most of the
individuals examined have removed their websites from the
Internet or have curtailed their activities. The Subcommittee
made referrals of potential violations of Federal and State law
to the appropriate members of the law enforcement community,
urging authorities to investigate further the activities of
several individuals involved with manufacturing and
distributing false identification documents. Nevertheless,
operators continue to spring up to take the places of those who
have closed their websites and offer false identification and
credentials over the Internet, although most of these new
operators are located abroad.
E. The Role of the Board of Directors In Enron's Collapse (July 8,
2002) S. Prt. 107-70
On July 8, 2002, the Subcommittee issued a bipartisan
report with findings and recommendations regarding ``The Role
of the Board of Directors In Enron's Collapse.'' This report
was the first of two issued by the Subcommittee during the
course of its Enron investigation. It cited and was based upon
evidence collected by the Majority and Minority staffs, working
together, to review hundreds of boxes of documents and conduct
interviews of 13 current and former members of the Enron Board
members, as well as other Enron personnel, Arthur Andersen
accountants, and experts in corporate governance and
accounting. It followed a Subcommittee hearing on May 7, 2002.
The Subcommittee concluded in the report that the Enron
Board had failed to safeguard Enron shareholders and
contributed to the collapse of the seventh largest public
company in the United States by allowing Enron to engage in
high-risk accounting, inappropriate conflict of interest
transactions, extensive undisclosed off-the-books activities,
and excessive executive compensation. The Subcommittee also
found that the Board had witnessed numerous indications of
questionable practices by Enron management over several years,
but chose to ignore them to the detriment of Enron
shareholders, employees, and business associates. The report
detailed evidence documenting numerous failures of duty by
Enron directors including the failure to stop Enron from using
misleading accounting; the failure to protect Enron
shareholders from unfair dealing in the LJM partnership in
which an Enron officer had a personal financial interest; the
failure to ensure adequate public disclosure of material off-
the-books liabilities; the failure to ensure the independence
of the company's auditor, Arthur Andersen; and the failure to
monitor or halt abuse by Board Chairman and Chief Executive
Officer Kenneth Lay of a company-financed, multi-million
dollar, personal credit line.
The report presented two sets of bipartisan Subcommittee
recommendations to strengthen internal and external oversight
of U.S. publicly traded corporations to stop corporate
misconduct. The first set of recommendations concentrated on
strengthening internal Board oversight. They included
recommendations that Board members at publicly traded companies
prohibit high-risk accounting practices, including significant
off-the-books activity used to make the company's financial
condition appear better than it is; prohibit the company's
outside auditor from also providing internal auditing or
consulting services and auditing its own work for the company;
and prohibit conflict of interest arrangements that allow
company transactions with a business owned or operated by
senior company personnel. The Subcommittee also recommended
that corporate Boards act to prevent excessive executive
compensation, including by exercising ongoing oversight of
officer and director compensation, ending company-financed
loans to officers and directors, and reducing stock option
compensation that encourages improper accounting or other
misconduct to increase the company stock price for personal
gain.
The second set of Subcommittee recommendations concentrated
on the Securities & Exchange Commission and the self-regulatory
organizations, including the national stock exchanges, and
called on them to strengthen corporate governance requirements
for publicly traded corporations. These bipartisan Subcommittee
recommendations included calling for stronger statutory,
regulatory and listing requirements for independent directors,
including by requiring a majority of the outside directors to
be free of material financial ties to the company; for
competent audit committees, including by requiring an audit
committee chair who has financial expertise and a committee
charter which requires oversight of the company's financial
statements and accounting practices and authorizes the
committee's selection and retention of the outside auditor; and
for independent auditors, including by prohibiting the
company's outside auditor from simultaneously providing the
company with internal auditing or consulting services and from
auditing its own work for the company.
Many of the Subcommittee's recommendations for stronger
corporate governance requirements were included in the
subsequently enacted Sarbanes-Oxley Act and in new regulatory
and listing requirements issued by the Securities & Exchange
Commission and the New York Stock Exchange.
F. Fishtail, Bacchus, Sundance, and Slapshot: Four Enron Transactions
Funded and Facilitated By U.S. Financial Institutions (January
2, 2003) S. Prt. 107-82
On January 2, 2003, the Subcommittee issued a bipartisan
report, entitled ``Fishtail, Bacchus, Sundance, and Slapshot:
Four Enron Transactions Funded and Facilitated By U.S.
Financial Institutions.'' This report was the second of two
issued by the Subcommittee in the course of its year-long Enron
investigation and presented findings and recommendations
relative to four Enron transactions that were the focus of a
Subcommittee hearing on December 11, 2002.
The report presented evidence obtained during a bipartisan
Subcommittee investigation of the role played by certain major
U.S. financial institutions in Enron's collapse and, in
particular, with respect to four multi-million dollar
structured finance transactions examined at the December
hearing. It presents evidence from the December hearing which,
when combined with evidence from earlier Subcommittee hearings
in July, shows that several of the largest U.S. financial
institutions were knowingly participating in, and at times
designing, advancing and profiting from, complex financial
transactions using deceptive accounting or tax strategies.
All four of the transactions detailed in the report related
to a new business venture by Enron involving pulp and paper
trading. All four had taken place over a 6-month period
beginning in December 2000 and ending in June 2001. All four
had been financed primarily by the Salomon Smith Barney unit of
Citigroup or by Chase. The report presented evidence showing
that Citigroup and Chase actively aided Enron in executing the
four transactions, despite knowing the transactions utilized
deceptive accounting or tax strategies, in return for
substantial fees or favorable consideration in other business
dealings.
The Fishtail, Bacchus, and Sundance transactions were
structured to appear to bring new investment into Enron's pulp
and paper business venture. In reality, these complex financial
deals enabled Enron to use a $200 million Citigroup loan in a
sham asset sale to boost its year-end cash flow and earnings,
and then quietly return the funds via Sundance. The report
concluded that, without Citigroup's participation and
willingness to provide the required financing, Enron would not
have been able to complete these deceptive transactions.
The Slapshot transaction, which was designed by Chase and
sold to Enron for $5 million, was a tax avoidance scheme that
Enron used to claim an estimated $60 million in Canadian tax
savings and $65 million in financial statement benefits.
Slapshot took place on June 22, 2001, and involved a complex
array of structured finance arrangements utilizing loans,
funding transfers, and transactions involving Chase and Enron
affiliates in two countries. The report described how, in
essence, Slapshot took a valid $375 million loan issued by a
consortium of banks to an Enron affiliate, combined it with a
$1 billion sham loan issued by a Chase-controlled shell
company, and then used the sham loan to inflate its Canadian
tax deductions and U.S. earnings.
In the report, the Subcommittee made several bipartisan
recommendations to strengthen Federal oversight of financial
institutions and stop them from helping U.S. companies engage
in deceptive accounting and tax transactions. These
recommendations focused in particular on coordinated action by
the Securities & Exchange Commission and bank regulators to
bridge a current gap in Federal oversight that exists because
the SEC does not generally regulate banks, and bank regulators
do not generally regulate accounting practices. The
Subcommittee recommendations included calling for a joint
Federal review of structured finance products and transactions
to identify those that facilitate deceptive accounting, an SEC
policy statement making it clear that the SEC would take
enforcement action against a financial institution that offers
deceptive financial products or participates in deceptive
transactions, and a policy statement by bank regulators making
it clear that bank examiners, as part of their routine bank
examinations, may evaluate a bank's structured finance
activities and declare problematic products or activities an
unsafe and unsound banking practice.
The requested review of structured finance products and
transactions had already been initiated by the Federal Reserve
which promised to report on its findings. Since the report, the
SEC has taken enforcement action against a financial
institution that assisted a company other than Enron to engage
in deceptive accounting. Chase announced its intention to
discontinue sales of the tax product involved in the Slapshot
transactions, and Citigroup announced a new corporate policy to
prevent Citigroup's participation in any transaction in which
the transaction's net effect is not accurately disclosed to a
company's investors and analysts. Investigations by the SEC,
U.S. Department of Justice, and Canadian tax authorities into
the transactions described in the report may also be underway.
V. Requested and Sponsored Reports From GAO
In connection with its investigations, the Subcommittee
makes extensive use of the resources and expertise of the
General Accounting Office (GAO), the Offices of Inspectors
General (OIGs) at various Federal agencies, and other entities.
During the 107th Congress, the Subcommittee requested a number
of reports and studies on issues of importance to Congress and
to U.S. consumers. Among these reports were the following:
(1) Money Laundering: Oversight of Suspicious Activity Reporting at
Bank-Affiliated Broker-Dealers Ceased (GAO-01-474) March 22,
2001
(2) Anti-Money Laundering: Efforts in the Securities Industry (GAO-02-
111) October 10, 2001
(3) Money Laundering: Extent of Money Laundering through Credit Cards
Is Unknown (GAO-02-670) July 22, 2002
In these three reports, completed at the request of Senator
Levin, GAO examined issues related to the money laundering
investigation being conducted by the Subcommittee. The first
two reports identified gaps and inadequacies in current anti-
money laundering efforts by the U.S. securities industry, while
the third looked at money laundering through the use of credit
cards.
In connection with the first two reports, GAO surveyed
3,015 broker-dealers and 310 direct-marketed mutual fund groups
in the United States to determine whether these firms had
voluntary anti-money laundering measures in place, such as
procedures to verify customers' identities, monitor account
transactions for possible money laundering, and report
suspicious activity to law enforcement. The GAO survey
estimated that only 17 percent of broker-dealers and 40 percent
of mutual fund groups reported having such voluntary measures
in place; an estimated 83 percent of the broker-dealers and 60
percent of the mutual fund groups, totaling more than 2,600
firms, did not have these measures. The GAO report, thus
established that thousands of U.S. securities firms did not
have even basic anti-money laundering controls in place, while
also noting that such controls were not legally required at the
time of the survey. The GAO report also described the concern
of U.S. law enforcement that criminals ``may increasingly
attempt to use the securities industry to launder money,'' and
included a list of 15 U.S. criminal and civil cases since 1997,
involving money laundering through brokerage or mutual fund
accounts, including a May 2000 indictment of a former prime
minister of Ukraine, Pavel Lazarenko, who allegedly laundered
$114 million through U.S. bank and brokerage accounts.
By identifying gaps and inadequacies in current anti-money
laundering laws when applied to funds entering the U.S.
financial system through securities accounts, these GAO reports
provided support for legislative efforts in the USA Patriot
Act, H.R. 3162, to expand these laws to apply to the securities
industry. Title III of the USA Patriot Act, signed into law by
President Bush on October 26, 2001, marked a major shift in
U.S. anti-money laundering statutes by applying their
requirements not only to U.S. banks, but also to U.S.
securities firms and other U.S. financial institutions. For
example, Title III of the USA Patriot Act, for the first time,
required all U.S. securities firms to establish anti-money
laundering programs, verify the identity of their customers,
exercise due diligence before opening accounts for foreign
financial institutions, bar accounts for foreign shell banks,
and report suspicious activity to law enforcement.
The third GAO report identified issues related to money
laundering vulnerabilities in the credit card industry,
including the use of credit cards issued by foreign offshore
banks to enable U.S. citizens or businesses to obtain access to
funds in accounts opened by these offshore banks. Among other
issues, the report examined the process by which foreign
offshore banks were able to convince major U.S. enterprises
like Master Card and Visa to authorize these banks to issue
brand name credit cards. These and other credit card money
laundering concerns are addressed, in part, by Title III of the
USA Patriot Act which expanded U.S. anti-money laundering laws
to apply to the credit card industry for the first time. This
change in the law has prompted major U.S. credit card
associations, companies, and banks to begin to develop anti-
money laundering programs. The Internal Revenue Service has
also begun a major enforcement effort to identify potentially
millions of U.S. citizens using credit cards to obtain access
to offshore funds in foreign bank accounts that are not listed
on their tax returns and may facilitate tax evasion.
(4) Criminal Debt: Oversight and Actions Needed to Address Deficiencies
in Collection Processes (GAO-01-664) July 16, 2001
(5) Civil Fines and Penalties Debt: Review of CMS' Management and
Collection Processes (GAO-02-116) December 31, 2001
(6) Civil Fines and Penalties Debt: Review of OSM's Management and
Collection Processes (GAO-02-211) December 31, 2001
(7) Civil Fines and Penalties Debt: Review of U.S. Customs Service's
Management and Collection Processes (GAO-02-655) May 31, 2002
In these four reports, GAO examined a variety of debt
collection issues of interest to Senator Collins. Since October
1985, the balance of uncollected criminal debt has grown from
$260 million to more than $13 billion in 2001. The U.S. Courts
have responsibility for receipting and recordkeeping criminal
debt and the Department of Justice is responsible for
collecting the debt.
The first report identified four key factors that have
contributed to the significant growth of uncollected criminal
debt. The factors are: (1) the nature of the debt, in that it
involves criminals who may be incarcerated or deported or who
have minimal earning capacity; (2) the pay, as required by the
Mandatory Victims Restitution Act of 1996; (3) interpretation
by the Financial Litigation Units of payment schedules set by
judges from which limit collection activities; and (4) State
laws that may limit the type of property that can be seized and
the amount of wages that can be garnished.
The second report focused on the debt collection processes
and procedures used by the Department of Health and Human
Services' (HHS) Centers for Medicare and Medicaid Services
(CMS). The primary reason for the growth of CMS' civil monetary
penalties (CMP) receivables was the expansion of fraud and
abuse detection activities from fiscal year 1995 through fiscal
year 1997. GAO's analysis of CMS' CMP receivable data revealed
similar financial accountability and reporting issues as those
identified for non-CMP receivables by CMS' external financial
statement auditors. GAO identified unreconciled differences of
tens of millions of dollars in the CMP receivables balances
reported by HHS and CMS for fiscal years 1997 through 1999, and
an unreconciled net difference of about $22 million between the
CMP receivables balance in CMS' general ledger and the detailed
subsidiary systems as of September 30, 2000.
The third report concentrated on the debt collection
processes and procedures used by the Department of the
Interior's Office of Surface Mining (OSM). GAO reported that
the low collection rates and significant write-offs of OSM's
civil fines and penalties is due to the poor financial
condition of certain debtors. Most uncollected fines and
penalties are associated with mining companies that are not
financially viable.
In the fourth report, the GAO reviewed the Customs
Service's management of and practices for collecting civil
fines and penalties debt. The GAO found that the gross debt
more than tripled from the beginning of fiscal year 1997 to the
end of fiscal year 2000, rising from $218.1 million as of
October 1, 1996, to $773.6 million as of September 20, 2000.
The primary reason for the growth in Customs' reported
uncollected debt was the bankruptcy of a Customs' broker in
2000. The GAO determined that the agency can strengthen some of
its debt collection policies and procedures by enhancing them
and better adhering to them.
(8) Illegal Aliens: INS's Processes for Denying Aliens Entry Into the
United States (GAO-02-220T) November 13, 2001
In this report, completed at the request of Senator Levin,
GAO examined certain border entry procedures for aliens seeking
entry into the United States. GAO also reviewed INS policy and
statistics on the attendance of certain groups of aliens at
removal hearings. This report provided data and analysis that
was considered in connection with a Subcommittee hearing on
November 13, 2001, entitled ``Review of INS Policy on Releasing
Illegal Aliens Pending Deportation,'' described earlier.
(9) Multifamily Housing: Improvements Needed in HUD's Oversight of
Lenders That Underwrite FHA-Insured Loans (GAO-02-680) July 19,
2002
In this report, at the request of Senator Collins, GAO
examined several HUD mortgage lending practices. Each year, the
Federal Housing Administration (FHA) insures billions of
dollars in multifamily housing mortgage loans to help
construct, rehabilitate, purchase, and refinance apartments and
healthcare facilities. However, the Department of Housing and
Urban Development (HUD) lacks assurances that the lenders
approved for the Multifamily Accelerated Processing (MAP)
program always meet all of HUD's qualifications. HUD's guidance
requires prospective lenders to submit documents showing that
they are financially sound, have a satisfactory lending record,
and have qualified underwriters. GAO found that HUD did not
always comply with, or effectively implement, controls and
procedures for reviewing and monitoring MAP lenders'
underwriting of loans.
(10) Critical Infrastructure Protection: Commercial Satellite Security
Should Be More Fully Addressed (GAO-02-781) August 30, 2002
In this report, at the request of Senator Collins, GAO
examined homeland security issues related to commercial
satellites. Government and private-sector entities rely on
satellites for services such as communication, navigation,
remote sensing, imaging, and weather and meteorological
support. Disruption of satellite services, whether intentional
or not, can have a major adverse economic impact. When using
commercial satellites, Federal agencies reduce risks by
securing data links and ground stations that send and receive
data. However, Federal agencies do not control the security of
the tracking and control links, satellites, or tracking and
control ground stations, which are typically the responsibility
of the satellite service provider. It is important to the
Nation's economy and security to protect against attacks on its
computer-dependent critical infrastructures, many of which are
privately owned. In light of the Nation's growing reliance on
commercial satellites to meet military, civil, and private
sector requirements, omitting satellites from the Nation's
approach to protecting critical infrastructure leaves an
important aspect of the country's infrastructures without
focused attention.
(11) Department of Education: Guaranteed Student Loan Program
Vulnerabilities (GAO-03-268R) November 21, 2002
(12) Purchases of Degrees from Diploma Mills (GAO-03-269R) November 21,
2002
In these two reports, at the request of Senator Collins,
GAO examined issues related to fraudulent educational degrees.
The first report investigated the weaknesses in the Department
of Education's administration of student loans for
postsecondary education under the Federal Family Education Loan
(FFEL) program. As a result of the investigation, GAO exposed
the vulnerabilities in the program by setting up a fictitious
school and obtaining approval for students loans totaling
$55,000 on behalf of three fictitious students.
The second report examined diploma mills that illegally
sell fraudulent academic degrees to individuals that use them
to gain positions and increase income based upon the documents.
GAO successfully purchased a degree from a diploma mill to
demonstrate how easily one can be obtained. The owner of a
mill, Degrees-R-Us, was questioned and admitted to the sales of
approximately one hundred fraudulent degrees over the past 2
years when his business began.
(13) Homeland Security: Information Technology Funding and Associated
Management Issues (GAO-03-250) December 13, 2002
In this report, completed at the request of Senators
Collins and Levin, GAO identified all pending issues from
earlier GAO reports related to information technology equipment
and programs at the 22 agencies being transferred to the new
U.S. Department of Homeland Security. This report was requested
by the Senators to facilitate the integration and improvement
of computer-related technologies at the new Department.